Richemont and BT boost European stock markets
* FTSEurofirst 300 rises 0.6 percent
* Euro STOXX 50 advances 0.5 percent
* Much of mainland Europe shut for holiday but markets open
* Merrill upgrade boosts Richemont and luxury goods stocks
* Some traders still concerned over euro zone
LONDON, Nov 1 (Reuters) - European shares rose on Thursday, helped by gains in major luxury goods stocks such as Richemont and LVMH, while a surge in telecoms group BT also helped markets recover from losses the day before.
The FTSEurofirst 300 index rose 0.6 percent to 1,102.50 points by around midday, while the euro zone's blue-chip Euro STOXX 50 index also rose 0.5 percent to 2,517.12 points.
Trading volumes, however, were thin due to public holidays in France, Italy, Spain and parts of Germany.
Swiss group Richemont advanced by 5.5 percent after Bank of America Merrill Lynch raised its rating on the stock to "buy" from "underperform".
The increase in Richemont's share price also lifted rival LVMH, which rose 3.2 percent, and those two stocks contributed to some of the biggest points gains on the FTSEurofirst 300 index.
Central Markets senior trader Joe Neighbour said he had followed the general positive investor sentiment towards European equities by buying Germany's DAX equity index, which was up 0.6 percent at 7,304.50 points, at 7,265 points.
However, he was more cautious on the luxury goods sector, since the industry is heavily reliant on consumer demand in China, which has shown signs of a slowdown in growth.
"The luxury goods companies have had a very good run, but if China does start to feel the pinch, then they may find it hard to repeat that performance over the next 12 months," he said.
BT cut its revenue outlook, but its shares still rose 6.5 percent to top the FTSE300 Eurofirst leaderboard, as investors welcomed the fact that BT had kept its earnings targets and increased its dividend.
Out of the companies on the STOXX 600 European index to have reported earnings so far, 47 percent of them have missed market expectations while 53 percent have beaten or met market forecasts.
Clairinvest fund manager Ion-Marc Valahu said European equities remained a compelling investment proposition, with the yields on offer from share dividends higher than historically low returns on cash or benchmark government bonds.
"I'm not overly bullish, but there's no reason not to own equities at these levels," he said.
However, other traders remained relatively negative, citing the euro zone's persistent debt crisis.
The FTSEurofirst 300 is up nearly 10 percent since late July, when European Central Bank (ECB) chief Mario Draghi pledged fresh measures to protect the euro currency.
However, the index has fallen back from a 2012 peak of 1,122.76 points in mid-September, with Spain under pressure to seek a sovereign bailout deal while Greece has struggled to meet the terms of its own rescue package.
"These markets will remain under pressure," said Berkeley Futures associate director Richard Griffiths.