* FTSEurofirst 300 rises 0.8 pct
* Handelsbanken up on strong profit
* BHP, other miners rise
By Brian Gorman
LONDON, July 20 (Reuters) - European share prices rose on Wednesday, building on gains made in the previous session after Wall Street rose sharply after some strong corporate results and renewed hopes for an agreement in Washington on the U.S. budget.
By 0842 GMT the FTSEurofirst 300 index of top European shares was up 0.8 percent at 1,085.00 points, after rising 0.8 percent in the previous session.
"It's important that there are slightly more positive tones coming out of Capitol Hill, at least averting an immediate issue with their debt ceiling," said Lothar Mentel, chief investment officer at Octopus Investments, which manages $4 billion.
Blockbuster sales of the iPhone and strong Asian business again helped Apple Inc crush Wall Street's expectations, driving its shares up more than 7 percent to a record high.
The Stoxx Europe 600 tech sector advanced 1 percent on Wednesday, with ARM Holdings up 3.8 percent, but stocks in Europe rose across the board, with the recently weakened STOXX Europe 600 banking sector index also up 1 percent.
Sweden's Handelsbanken
The pan-European index touched a new low for 2011 on Tuesday, 1065.72, slightly lower than the mid-March low, 1066.62. Analysts said it would continue to trade in a narrow range. The index hit a 2011 high of 1,190.51 in mid-February.
"We're within the trading range, driven by good and bad news. The U.S. earnings season will be a positive catalyst and gives us more perspective, compared to the worries and concerns about the euro zone debt crisis. I don't expect markets to break out of the trading range."
BHP Billiton rose 2.9 percent after the world's biggest miner posted a faster than expected recovery in output after a flood-hit start to the year.
The Stoxx Europe 600 Basic Resources index rose 1.5 percent. Other miners to gain, with copper prices having hit three-month highs on Tuesday, included Rio Tinto , up 2.3 percent.
SMALL AND MID CAPS
However, strategists at Citigroup pointed to European smaller and medium-sized companies outperforming. "A six-month earnings momentum strategy continues to produce results for the small and mid-caps. We expect this strategy will continue to outperform from here," Citi said in a note.
"Earnings momentum strategies continue to be broadly pro-cyclical with a preference for emerging markets exposure. Financial Services look stronger than they did on six-month earnings momentum and is the top sector on shorter-term earnings momentum."
Armed with a new template, U.S. president Barack Obama and congressional leaders will try on Wednesday to see if an elevent-hour deal is still possible to avert a rapidly approaching default on the country's tumultuous debt. The ambitious new plan offers a ray of hope in an increasingly grim stand-off that has threatened the United States' top-notch credit rating.
Meanwhile leaders of the 17-nation euro zone currency bloc are due to gather in Brussels on Thursday for emergency talks in a bid to draw a line under Greece's spiralling debt crisis.
But strategists were not optimistic the issue will be resolved soon.
"This will drag on. The inability of the EU and other countries will serve to moderate the market's gains," said Mentel.
In other economic news, the Bank of England's Monetary Policy Committee voted 7-2 to leave interest rates at their record low 0.5 percent this month, and judged that recent economic weakness had reduced the chance that rates would need to rise in the near term, minutes to the BoE's July meeting showed on Wednesday.
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