* FTSEurofirst 300 ends up 0.3 pct
* Volumes at 25 pct of 30-day average; UK on holiday
* Erste Bank top gainer on bullish central bank report
By Simon Jessop
LONDON, Dec 28 (Reuters) - European shares closed higher in
thin holiday trade on Tuesday, bouncing from the previous
session's selloff and adding modestly to the December rally.
The FTSEurofirst 300 <> closed up 0.3 percent at
1,140.31 points and remains on track for its biggest monthly
gain since March, bouncing from Monday's 0.9 percent fall in
reaction to China's weekend interest rate rise.
Volumes were still extremely low, however, at just a quarter
of the 30-day average, with many traders' books closed for the
year, while a UK holiday and bad weather in the U.S. northeast
further thinned trading floors.
The UK market, home to a number of banking, oil and mining
heavyweights, is due to reopen on Wednesday. No major corporate
or economic news is expected.
Cheap equity market valuations should continue to support
the market heading into the new year, although economic
headwinds remain, Geert Ruysschaert, equity strategist at BNP
Paribas Fortis, said.
"Equities offer value for money, but macroeconomic
uncertainty is preventing them from rising faster," he said,
citing euro zone sovereign debt concerns as key, although equity
market returns were still enough "with respect to their risk".
The STOXX Europe 600's forward price-to-earnings ratio is
around 10.9, well below a 10-year average of 13.8, according to
Thomson Reuters Datastream.
After receiving early support from news that Japanese
factory output had risen for the first time in six months,
European shares briefly dipped on weaker-than-forecast U.S.
consumer confidence and housing data, before recovering.
[]
Europe's response to the consumer confidence data was in
line with expectations, said a London-based trader. "I wasn't
necessarily expecting them to be that great, as the jobless
figures of late haven't been that encouraging," he added.
Across Europe, France's CAC 40 <> closed down 0.1
percent and Germany's DAX <> ended flat. At the Europe
close, the Dow Jones industrial average <> and S&P 500
<.SPX> were both near flat.
Among individual issues, Vienna-listed Erste Bank <ERST.VI>
rose 2 percent, buoyed by a positive profit outlook for Austrian
banks from the country's central bank. []
French telecoms equipment maker Alcatel-Lucent <ALUA.PA>
rose 1.9 percent after it agreed a deal with U.S. authorities to
settle charges it paid bribes to win business in Latin America
and Asia. []
Among carmakers, BMW <BMWG.DE> continued its Monday sell-off
on a weakening outlook for sales in China and a downgrade to
"sell" from "buy" from Metzler Equity Research.
A decision by Beijing to limit new-car registrations in the
capital would hit the German firm particularly hard, as it had
the "highest exposure to China in terms of relative earnings
contribution", the broker said.
(Additional reporting by Atul Prakash and Harpreet Bhal;
Editing by Erica Billingham)
