(Corrects literal in paragraph 1)
* FTSEurofirst 300 up 1.3 pct, up 6.5 pct in 3 weeks
* UK shares catch up with Monday's gains after holiday
* Euro STOXX 50 struggles to break above key resistance
* After market rout, good entry points in luxury -trader
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By Blaise Robinson
PARIS, Aug 30 (Reuters) - European stocks gained ground in early trade on Tuesday, adding to their recovery rally on rising expectations key U.S. macro data due this week will ease fears over the prospect of another global economic downturn.
At 0828 GMT, the FTSEurofirst 300 index of top European shares was up 1.3 percent at 943.20 points. Europe's benchmark index has gained 6.5 percent since hitting a floor three weeks ago but volumes have remained thin.
UK's FTSE 100 index soared 2.5 percent, with BHP Billiton up 3.4 percent and Burberry up 5.1 percent, catching up with the wider market gains on Monday when the UK market was closed for a holiday.
"The market's drop over the past two months has created a number of interesting entry points," said David Thebault, head of quantitative sales trading, at Paris-based broker Global Equities.
"Luxury stocks, which were quite expensive at the beginning of the summer, are now attractive again while the fundamentals of the sector are intact."
Hermes was up 0.9 percent, Richemont up 0.8 percent and Luxottica up 1.6 percent.
Investors awaited a slew of key U.S. data this week, including consumer confidence, the ADP jobs report, ISM manufacturing and the non-farm payrolls report.
The market will also keep an eye on minutes from the U.S. Federal Reserve's last committee meeting on Aug. 9, due on Monday, which could offer insight on divisions among board members over further stimulus measures.
VSTOXX BELOW 40
While fears to see the world's biggest economy slip again into recession abated this week, the Euro STOXX 50 volatility index known as VSTOXX index -- one of Europe's main barometers of anxiety -- dropped 3.7 percent to a near-two week low below the psychological level of 40.
The lower the volatility index, based on sell- and buy-options on the Euro STOXX 50 stocks, the higher investors' appetite for risky assets such as stocks.
"I wouldn't be surprised to see it falling back to around 30 soon," Global Equities's Thebault said.
The euro zone's blue chip Euro STOXX 50 index was up 0.6 percent on Tuesday at 2,252.97 points, struggling to convincingly break above 2,246.86 points, its first key resistance level following its 26 percent nosedive, which represents the 23.6 percent Fibonacci retracement.
The index's chart has formed a triangle pattern over the past few weeks and the exit of the triangle, especially if volumes are strong, should send the index testing either the top or the bottom of the triangle, respectively at 2,450 points and 2,077 points, said Alexandre Le Drogoff, technical analyst at Aurel BGC, in Paris.
"But despite the potential impulse triggered when the index exits the triangle, it should stay range-bound after that, just like it did in the first half of 2008, waiting for the 50-day and 200-day moving averages to get reunited with prices," he said.
"On a 3 to 6-month horizon, we have a negative opinion for the index. A new pull-back could send the index to fresh year-lows." (Reporting by Blaise Robinson; Editing by Jon Loades-Carter)
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