By Blaise Robinson

PARIS, Dec 5 (Reuters) - European stocks rose in early trade on Wednesday as mining shares gained after another bid in the sector, helping the broader market snap a two-session drop.

Both BHP Billiton <BLT.L> and Anglo American <AAL.L> gained 2.7 percent, while Xstrata <XTA.L>, which made a $842 million bid for Australia's Resource Pacific, rose 3 percent.

Energy stocks also rallied, with BP <BP.L> up 0.8 percent, Royal Dutch Shell <RDSa.L> up 1.7 percent, and Total <TOTF.PA> up 1.4 percent, as oil prices rose after OPEC oil producers agreed to keep oil output unchanged.

By 0915 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.7 percent at 1,510.48 points. Europe's benchmark index, which lost 1.3 percent on Tuesday, is up 1.8 percent on the year.

Banks were mixed, with UBS <UBSN.VX> down 0.2 percent, and BNP Paribas <BNPP.PA> up 0.7 percent.

"It would be premature to say that we have reached a floor," said Dominique Mace, chief investment officer at Barclays Wealth Managers France.

"Volatility will remain high. The interbank lending market is still very tense as banks are looking for financing to close the year. We might also get a few more negative surprises, particularly when the banks will report their fourth-quarter results."

"Analysts might lower their forecast for 2008, although that looks already priced in. But overall, stocks have been quite resilient so far, and there is an upside potential going forward."

Around Europe, Germany's DAX index <.GDAXI> was up 0.7 percent, Britain's FTSE 100 index <.FTSE> up 1.3 percent and France's CAC 40 <.FCHI> up 1.1 percent.

France Telecom <FTE.PA> fell 1 percent after its growth plan unveiled before the opening failed to impress investors.

German stock exchange operator Deutsche Boerse <DB1Gn.DE> added 4.6 percent after Morgan Stanley raised its price target on the stock to 145 euros from 122 euros, and kept its rating at "overweight".

Troubled UK lender Northern Rock <NRK.L> fell 3.3 percent after the Daily Telegraph newspaper reported that the British government has drawn up a bill to nationalise the firm if the company fails to strike a deal with a private buyer.

On the macroeconomic front, investors will keep an eye on U.S. ISM non-manufacturing index for November, expected at 1500 GMT.

But the main focus remains on rate decisions by both the European Central Bank and the Bank of England on Thursday, as well as on U.S. monthly jobs figures, due on Friday, that could shed light on the health of the U.S. economy and the outlook for rates.

"The market is eagerly awaiting the release of the employment report. The major talking point remains the Fed rate decision next Tuesday, with the market expecting a rate cut, but debating the size of the cut," Oliver Stevens, head of dealing at IG Markets wrote in a note. (Editing by Quentin Bryar) (([email protected] ; +33 1 4949 5269, Reuters Messaging: [email protected]))

Keywords: MARKETS EUROPE STOCKS

 
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    For rolling updates on what is moving European shares  
    please click on [STXNEWS/EU] 
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 For pan-Europeanmarket data and news, click on codes in  
 brackets: 
 European Equities speed guide...................<EUR/EQUITY> 
 FTSEurofirst 300 index..............................<.FTEU3> 
 DJ STOXX index......................................<.STOXX> 
 Top 10 STOXX sectors...........................<.PGL.STOXXS> 
 Top 10 EUROSTOXX sectors......................<.PGL.STOXXES> 
 Top 10 Eurofirst 300 sectors...................<.PGL.FTEU3S> 
 Top 25 European pct gainers.......................<.PG.PEUR> 
 Top 25 European pct losers........................<.PL.PEUR> 
    Main stock markets: 
 Dow Jones...............<.DJI>  Wall Street report .....[.N] 
 Nikkei 225.............<.N225>  Tokyo report............[.T] 
 FTSE 100...............<.FTSE>  London report...........[.L] 
 Xetra DAX.............<.GDAXI>  Frankfurt market stories[.F] 
 CAC-40.................<.FCHI>  Paris market stories...[.PA] 
 World Indices......................................<0#.INDEX> 
 Reuters survey of world bourse outlook..........<EQUITYPOLL1> 
 Western European IPO diary...........................[WEU/IPO] 
 European Asset Allocation.........................[EUR/ASSET] 
    Reuters News at a Glance: Equities...............[TOP/EQE] 
    Main currency report:...............................[FRX/] 
  Keywords: MARKETS EUROPE STOCKS/ =2