REFILE-European shares rise on rate cut and summit hopes
* FTSEurofirst 300 rises 0.4 pct
* Investors await ECB rate decision, EU summit
* Tesco down as UK sales fall
By Brian Gorman
LONDON, Dec 8 (Reuters) - European shares rose in early trade on Thursday as investors bet on a rate cut from the European Central Bank and a bold plan from an EU summit to help resolve the euro zone debt crisis.
At 0924 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 992.33 points, near its highest in more than five weeks.
Optimism that policymakers would successfully address the euro zone debt crisis, and last week's announcement that coordinated central banks action would provide cheaper dollar funding for European banks, has helped boost investor confidence.
Stocks rose across the board, with the heavyweight banking sector among the biggest gainers. The STOXX Europe 600 Banking Index rose 0.6 percent, and has risen more than 13 percent in just over two weeks, on hopes the euro zone crisis will be resolved. But the index is down more than 30 percent in 2011, with banks having suffered writedowns on sovereign debt in the region.
Banks will be in the spotlight as the European Banking Authority will indicate how much extra capital the region's banks will need to cope with the debt crisis, a key part of its plan to revive confidence in the bruised sector. EBA said details of the bank recapitalisation needs will be released at 1700 GMT.
The European Central Bank is expected to cut rates to 1 percent and unveil a new package of bank aid on Thursday, with markets also watching for any hint it will intensify its bond buying support. The ECB decision is expected at 1245 GMT.
France and Germany are to sound out European leaders about their plan to defuse the euro zone's debt crisis, eager to rally support before a high-stakes EU summit. The plans include tougher budget discipline.
"There's anticipation of something solid, good news. You don't want to be short in case France and Germany put something significant together," said Yusuf Heusen, sales trader at IG Index.
Miners also gained, with prices for copper and other metals having gained in recent days, partly on optimism about the summit. The STOXX Europe 600 Basic Resources Index rose 0.7 percent.
Antofagasta and Kazakhmys rose 1.3 and 1.7 percent respectively, as Nomura upgraded its ratings for both in a review of the copper sector.
Strategists said the market was also pricing in the ECB starting quantitative easing.
Jeremy Batstone-Carr, strategist at Charles Stanley, said the market could fall 6 percent if the ECB did not indicate it would print money and only "vague platitudes" emerged from the summit.
"I can't see where a continuation of this rally is going to come from," he said.
Among individual companies, Tesco, the world's No. 3 retailer, fell 1 percent after posting a drop in underlying British sales for the fourth quarter in a row, overshadowing a more solid performance in its overseas markets.
At 1200 GMT, investors will also look at the Bank of England's announcement, but it looks set to leave monetary policy unchanged. Interest rates have been at a record low of 0.5 percent for nearly three years.
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