UPDATE 2-European stocks rise, Huawei reprieve boosts tech shares


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    * Tech stocks gain; U.S. eases some Huawei restrictions
    * Norsk Hydro surges 5.6% after court lifts embargo on
    * Vestas Wind Energy gains on Fortum order

 (Updates to close, recasts, adds quotes from market analyst,
portfolio manager)
    By Aaron Saldanha
    May 21 (Reuters) - European shares rose on Tuesday, with
tech stocks contributing to gains as they recovered some ground
lost in the previous session following a temporary easing of
U.S. restrictions on China's Huawei. 
    The Unites States allowed Huawei Technologies to buy
U.S.-made goods to maintain existing networks and provide
software updates to existing Huawei handsets until Aug. 19 after
blocking it from buying U.S. goods last week.  urn:newsml:reuters.com:*:nL2N22W19U
    The pan-European STOXX 600  .STOXX  gained 0.5%, with
Germany's trade-sensitive DAX  .GDAXI  rising 0.9%.
London-traded stocks  .FTSE  pared gains as the pound  GBP= 
firmed on Prime Minister Theresa May's comments about the next
Brexit votes.  urn:newsml:reuters.com:*:nL5N22X5EK .L   GBP/ 
    "I think the easing up on Huawei is being seen as a sign
that while the United States and China are unhappy with each
other, neither side wants to burn the negotiation bridge at the
moment," said Connor Campbell, an analyst at Spreadex in London.
    The tech sector  .SX8P  rose 1.6%, making back a chunk of
Monday's 2.8% slide. Chipmakers Infineon Technologies
 IFXGn.DE , AMS  AMS.S  and STMicroelectronics  STM.PA  gained
between 1% and 4.2%. 
    Telecom Italia  TLIT.MI  rose 2.3% as it posted first
quarter results and confirmed its guidance for the next three
years. The firm's chief executive said it was in touch with five
banks over plans to create a joint venture to offer consumer
credit services.  urn:newsml:reuters.com:*:nFWN22W0AG urn:newsml:reuters.com:*:nS8N1YM030
    Italy's biggest phone group reported a "solid set of
results", with core earnings beating the consensus expectation
of analysts, Deutsche Bank said in a note. 
    Norsk Hydro  NHY.OL  climbed 5.6% as a Brazilian federal
court allowed the Oslo-traded firm to resume full output at the
world's largest alumina refinery for the first time in more than
a year.  urn:newsml:reuters.com:*:nL5N22W4WW
    Oil and gas stocks  .SXEP  added 1%, with Vestas Wind Energy
 VWS.CO  leading the gains with a 3.9% rise. The Danish firm
secured an order from Finland's Fortum  FORTUM.HE  for a 90
megawatt wind project and launched a wind turbine targeting the
U.S. market.  urn:newsml:reuters.com:*:nFWN22W0RF urn:newsml:reuters.com:*:nL5N22W240
    Banks  .SX7P  rose 0.7%, lifting off Monday's more-than
three-month closing low. 
    As risk appetite crept back into markets, defensive stocks
in sectors such as telecommunications  .SXKP  underperformed. 
    However, stocks are not yet out of the woods, still plagued
by investor uncertainty regarding the U.S.-China trade war.     
    "We've had a very powerful rally (year-to-date) and if there
is a continued escalation or a failure to resolve where we go
from here, there is certainly downside in equity markets," said
Simon Webber, lead portfolio manager on the global &
international equities team at Schroders.   

 (Reporting by Aaron Saldanha, 
and Amy Caren Daniel in Bengaluru; Josephine Mason in London)
 ((Aaron.Saldanha@thomsonreuters.com; +91 80 6749 1130; Reuters
Messaging: Aaron.Saldanha@thomsonreuters.com@reuters.net))

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