* FTSEurofirst 300 up 0.4 pct, Euro STOXX 50 up 0.4 pct
* Italian stocks outperform as Berlusconi expelled
* Italian shares still cheapest in Europe
* Thomas Cook surges after raising targets
By Blaise Robinson
PARIS, Nov 28 European stocks gained ground on
Thursday in light trade, with Italian shares outperforming after
the country's Senate expelled former prime minister Silvio
Berlusconi, fuelling hopes of stability for the current
At 1531 GMT, the FTSEurofirst 300 index of top
European shares was up 0.4 percent at 1,306.02 points and the
euro zone's blue-chip Euro STOXX 50 index was also
up 0.4 percent, at 3,093.30 points.
Milan's FTSE MIB jumped 1.1 percent, with banks
Intesa Sanpaolo up 2.3 percent and UBI Banca
up 2.4 percent.
Late on Wednesday, the Italian Senate expelled Berlusconi
over his tax fraud conviction, while Prime Minister Enrico Letta
said his government would press on with its reform programme.
"It brings more visibility about the Italian government.
Investors bet that things will be more stable from here," said
Riccardo Designori, financial analyst at Brown Editore, in
"The review of banks' holdings in the Italian central bank
is also boosting the banking sector today, and it could turn out
to be a game changer," Designori said.
Late on Wednesday, a government decree approved a
revaluation of bank holdings in the Bank of Italy, aimed at
helping the banks improve their capital positions.
Italian shares have been outpacing the broader market since
June, with the MIB surging 28 percent while the broad STOXX
Europe 600 gained 18 percent. But despite the
outperformance, Italian shares remain among the cheapest across
Europe, trading at 12 times expected earnings in the next 12
months, while the STOXX 600 trades at 13.5 times.
Around Europe, the UK's FTSE 100 index and France's
CAC 40 were both up 0.2 percent on Thursday and
Germany's DAX index was 0.4 percent higher.
Tour operator Thomas Cook featured among the top
gainers, leaping 14 percent after it raised its revenue and
cost-cutting targets in the latest stage of a profit-boosting
Heavyweight mining company Rio Tinto also gained
ground, up 4.7 percent after it unveiled an ambitious plan to
cut costs by $3 billion.
Following a four-month rally which propelled pan-European
indexes to five-year highs, stocks stalled in late October and
have moved sideways since.
The market has been capped by mixed macroeconomic data, a
raft of lower-than-expected corporate earnings as well as
worries over the outlook for the U.S. Federal Reserve's stimulus
However, David Thebault, head of quantitative sales trading
at Global Equities, sees further gains on the market before the
end of the year, supported by strong central bank liquidity and
an acceleration in mergers and acquisitions.
"Almost everyday, there's a deal announced," he said.
"European companies are sitting on about 1,000 billion euros
in cash, and the best option they have in this low growth
environment is to make acquisitions instead of boosting capital
expenditure. So we can expect many more deals, and that will
support the market."