BP leads energy sector and European shares higher

* FTSEurofirst 300 rises 0.7 percent

* BP rises as partner makes $1.1 bn payment

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Brian Gorman

LONDON, May 19 (Reuters) - European shares rose in early trade on Friday, with BP leading the energy sector up after a partner agreed to pay it more than $1 billion towards the cost of its Gulf of Mexico oil spill.

At 0846 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.7 percent at 1,146.61 points, on track for a third day of gains, after rising 0.7 percent in the previous session.

BP rose 3.5 percent as MOEX, a unit of Japanese trading house Mitsui & Co <8031.T>, and partner in BP's Macondo well in the Gulf of Mexico, agreed to pay the UK oil major $1.1 billion toward the cost of the massive spill last year.

The energy sector as a whole gained on stronger crude prices, as the dollar weakened. Total rose 1.1 percent.

London-listed commodities trader Glencore remained little changed on its second day of conditional dealing, with a market capitalisation of more than 6 billion pounds.

Wall Street edged higher on Thursday, with social network company LinkedIn soaring on its debut. "Glencore and LinkedIn getting away is positive, and strong results and cash available for transactions may encourage more M&A to give equities a push and boost valuations," said Justin Urquhart Stewart, director at Seven Investment Management.

"Most people don't see this market as being particularly stretched. But there's a concern about where the growth comes from."

Miners also gained, as the price of copper and other metals picked up. Antofagasta and Kazakhmys rose 2.1 and 2.3 percent respectively.

Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX <.GDAXI> and France's CAC40 <.FCHI> rose between 0.5 and 1 percent.

STANDARD CHARTERED GAINS

The heavyweight banking sector <.SX7P> also enjoyed the rally, up 0.6 percent. Standard Chartered rose 1.6 percent higher as UBS upgraded the Asia-focused bank to "buy" from "neutral".

But some investors remain worried about banks' exposure to the peripheral countries of the euro zone, as it struggles with a debt crisis.

Equity valuations on Thomson Reuters Datastream showed the STOXX Europe 600 <.STOXX> carrying a one-year forward price-to-earnings of about 10.8 against a 10-year average of 13.5.

With some 90 percent of companies in the Stoxx Europe 600 due to report earnings in the current season having done so, 55 percent of that proportion have beaten or met forecasts, according to Thomson Reuters StarMine data.

The pan-European index is on track to post a 0.5 percent gain for the week but is "terribly rangebound", said Bill McNamara, technical analyst at Charles Stanley. "The 50-day moving average is providing some support. Resistance looks pretty firm, and it's not easy to see what will cause it to break out." (Editing by Jon Loades-Carter)