UPDATE 2-European stocks rise, Huawei reprieve boosts tech shares
* Tech stocks gain; U.S. eases some Huawei restrictions
* Norsk Hydro surges 5.6% after court lifts embargo onAlunorte
* Vestas Wind Energy gains on Fortum order (Updates to close, recasts, adds quotes from market analyst,portfolio manager)
May 21 (Reuters) - European shares rose on Tuesday, withtech stocks contributing to gains as they recovered some groundlost in the previous session following a temporary easing ofU.S. restrictions on China'sHuawei.
The Unites States allowed Huawei Technologies to buyU.S.-made goods to maintain existing networks and providesoftware updates to existing Huawei handsets until Aug. 19 afterblocking it from buying U.S. goods last week. urn:newsml:reuters.com:*:nL2N22W19U
The pan-European STOXX 600 .STOXX gained 0.5%, withGermany'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 nextBrexit votes. urn:newsml:reuters.com:*:nL5N22X5EK.LGBP/
"I think the easing up on Huawei is being seen as a signthat while the United States and China are unhappy with eachother, neither side wants to burn the negotiation bridge at themoment," said Connor Campbell, an analyst at Spreadex in London.
The tech sector .SX8P rose 1.6%, making back a chunk ofMonday's 2.8% slide. Chipmakers Infineon Technologies IFXGn.DE , AMS AMS.S and STMicroelectronicsSTM.PA gainedbetween 1% and 4.2%.
Telecom ItaliaTLIT.MI rose 2.3% as it posted firstquarter results and confirmed its guidance for the next threeyears. The firm's chief executive said it was in touch with fivebanks over plans to create a joint venture to offer consumercredit services. urn:newsml:reuters.com:*:nFWN22W0AGurn:newsml:reuters.com:*:nS8N1YM030
Italy's biggest phone group reported a "solid set ofresults", with core earnings beating the consensus expectationof analysts, Deutsche Bank said in a note.
Norsk HydroNHY.OL climbed 5.6% as a Brazilian federalcourt allowed the Oslo-traded firm to resume full output at theworld's largest alumina refinery for the first time in more thana 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 firmsecured an order from Finland'sFortumFORTUM.HE for a 90megawatt wind project and launched a wind turbine targeting theU.S. market. urn:newsml:reuters.com:*:nFWN22W0RFurn:newsml:reuters.com:*:nL5N22W240
Banks .SX7P rose 0.7%, lifting off Monday's more-thanthree-month closing low.
As risk appetite crept back into markets, defensive stocksin sectors such as telecommunications .SXKP underperformed.
However, stocks are not yet out of the woods, still plaguedby investor uncertainty regarding the U.S.-China trade war.
"We've had a very powerful rally (year-to-date) and if thereis a continued escalation or a failure to resolve where we gofrom here, there is certainly downside in equity markets," saidSimon 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; ReutersMessaging: Aaron.Saldanha@email@example.com))