* FTSEurofirst up 0.6 pct, recovering from Thursday's fall
* Euro STOXX 50 also advances 0.6 pct
* China data boosts mining and bank stocks
* Broker upgrades boost DNB and Vodafone
LONDON, Feb 8 (Reuters) - European shares rose on Friday to recover from sharp falls the previous session, as robust Chinese trade data boosted expectations the global economy would strengthen and in turn maintain demand for equities.
The pan-European FTSEurofirst 300 index rose 0.6 percent to 1,155.25 points, bouncing back from a 0.3 percent fall on Thursday that sent it to its lowest close since Dec. 31.
The euro zone's blue-chip Euro STOXX 50 index also rose 0.6 percent to 2,613.72 points.
Data showed Chinese exports grew 25 percent in January from a year earlier versus a Reuters poll forecast of 17 percent, while imports climbed 28.8 percent, highlighting robust domestic demand.
The new signs of growth in China, which is the world's biggest consumer of metals, boosted mining stocks and financial shares which are sensitive to the health of the global economy.
The STOXX Europe 600 banking index and the basic resources index, which includes mining companies, stood out as among the best-performing European equity sectors, rising by 1.1 and 0.5 percent respectively.
Expectations of a gradual economic recovery has led many investors to step in to buy shares on days when the market has fallen, preventing any major pull-back on equities in spite of lingering worries over the euro zone's sovereign debt crisis.
"I think China is clearly moving in the right direction, and this should support the equity markets," said Cyrille Urfer, who heads up asset allocation at Swiss bank Gonet.
"We're in a 'risk-on' mode and continental Europe should continue to do well in this environment. We favour Europe over the UK," he added.
UPGRADE BOOSTS VODAFONE
Norwegian bank DNB rose towards the top of the FTSEurofirst 300 index, as Credit Suisse upgraded its rating on the stock to "neutral" from "underperform" after DNB's better-than-expected earnings this week.
A broker upgrade also lifted UK telecoms group Vodafone , whose 1.9 percent rise added the most points to the FTSEurofirst 300 index after Bank of America Merrill Lynch raised its rating on it to "buy" from "neutral".
In a research note, Bank of America Merrill Lynch wrote there were several catalysts that could lift Vodafone's stock, including a rise in its U.S. dividends, a sale of its stake in Verizon Wireless and the possibility of share buybacks.
Yet despite the rebound in European equities, some traders had a more cautious stance on European stock markets.
They argued that uncertainty over Italian elections this month and persistent economic weakness in Europe - compared to growth in Asia and the United States - could curb any bigger moves higher on European stock markets this quarter.
Central Markets senior broker Joe Neighbour recommended a "pairs trade" to go "short" on Germany's DAX while going "long" on the U.S. S&P 500 - namely betting on a fall on the DAX and a rise on the S&P 500.
"Signs of a U.S. economic recovery are evident, however the fundamental issues impacting the euro zone are yet to be dealt with," he said. (Reporting by Sudip Kar-Gupta/editing by Chris Pizzey, London MPG Desk, +44 (0)207 542-4441)