Europe shares rise as UK plays catch-up; BP gains

                                
 * FTSEurofirst 300 rises 0.8 pct
                                
 * London catches up with Monday rally on mainland Europe
                                
 * BP rises on Shell takeover report
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Brian Gorman
                                
 LONDON, Jan 4 (Reuters) - European shares rose in early
trade on Tuesday, tracking gains on Wall Street, following
upbeat economic data, and with London shares catching up with
gains on mainland Europe in the previous session.
                                
 At 0932  GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was up 0.8 percent at 1,141.69 points, after
rising 1 percent in the previous session. Trading volume
returned to more normal levels, with more than 24 percent of the
90-day average having traded, following the thin sessions over
the holiday period.
London shares traded for the first time in 2011, and were
catching up to some extent with Monday's rally on mainland
Europe. Britain's FTSE 100 <.FTSE> was up 1.8 percent.
                                
 Data from the United States, Europe and China helped Wall
Street reach new two-year highs.
                                
 "People are starting to recognise there is some improvement
in the employment picture in the United States. You would expect
to see some of the confidence of the PMI to be reflected in the
non-farm payrolls (on Friday)," said Philip Isherwood, European
equities strategist at Evolution Securities.
                                
 Oil heavyweight BP <BP.L> rose 4.2 percent, following a
report that rival Shell <RSDa.L> has been mulling a bid for it.
[ID:nLDE7030G8] 
                                
 Other energy companies gained as crude prices hovered near
27-month highs, helped by expectations that the weather will
keep U.S. inventories low. BG Group <BG.L>, Cairn Energy <CNE.L>
and Tullow Oil <TLW.L> rose between 1.4 and 2.3 percent.
 Copper hit yet another record high in London, and other
metals rose, helped by positive manufacturing data from around
the world.  Antofagasta <ANTO.L>, Fresnillo <FRES.L>, Kazakhmys
<KAZ.L> and Xstrata <XTA.L> rose between 1.8 and 5 percent.
Across Europe, Germany's DAX <.GDAXI> and France's CAC40
<.FCHI> rose 0.2 and 0.3 percent respectively.

                                
 GREEK BANKS FALL
                                
 Greece's fourth-largest lender Piraeus Bank <BOPr.AT> fell
11.8 percent after saying it will issue new shares to raise 807
million euros ($1.06 billion) to boost its balance sheet and
cope with the Greek debt crisis. [ID:nLDE7020J6] 
                                
 Other Greek banks to fall included Alpha Bank <ACBr.AT>,
down 2.8 percent. 
                                
 However, others in the sector were higher. RBS <RBS.L> rose
4 percent after Exane BNP Paribas upgraded it to "outperform",
with the French broker saying a sharp sell-off induced by the
bank's exposure to debt crisis-hit Ireland presents a buying
opportunity. 
                                
 British mortgage approvals rose unexpectedly in November to
their highest level since July, but unsecured consumer lending
suffered its biggest monthly fall since August, Bank of England
figures showed on Tuesday.
                                
 Later, investors' attention will turn to U.S. economic data,
such as factory orders.
                                
 The European stocks benchmark rose 7.3 percent in 2010, and
is up more than 76 percent from its lifetime low of March 2009,
with several major economies having emerged from recession,
helped by stimulus from governments and central banks worldwide.
 (Editing by Hans Peters)