* FTSEurofirst 300 up 0.2 pct, Euro STOXX 50 flat
* Stocks build on sharp two week rally
* Monte Paschi recovers most of early losses after cash call
By Alistair Smout
LONDON, Dec 30 European stocks edged higher on
Monday, consolidating in holiday-thinned trade after two weeks
of strong gains that have pulled markets to five-year highs.
Italian lender Monte Paschi failed to open in
early trade after its shareholders voted on Saturday to delay a
vital cash call, but the stock later recouped most of early
losses of as much as 5.6 percent.
The pan-European FTSEurofirst 300 index was 0.2
percent higher at 1,315.97, having ended up 1.1 percent at
1,314.29 points on Friday, its highest closing level since
The benchmark index, which is up around 6 percent in the
last fortnight, is on track to post a gain of 16 percent for
2013, with just two sessions left in the year.
The euro zone's blue chip EuroSTOXX 50 was flat
after rallying 6.6 percent over the last two weeks. It also
closed at a five-year high on Friday.
Both indexes have been boosted following the U.S. Federal
Reserve's decision to temper the scaling back of its stimulus
programme with the promise of lower interest rates for longer.
The U.S. economy also seems to be strengthening, albeit from a
"The conditions for the market remain very favourable. Even
if the fundamentals aren't looking great yet, central banks
remain easy (on policy) for the time being, despite (Fed
tapering)," Gerard Lane, equity strategist at Shore Capital,
"People believed (ECB president Mario) Draghi when he said
he'd do whatever it takes (to protect the euro), and so long as
he and the Fed remain easy, that supports markets and helps them
look through issues like we've seen with Monte Paschi."
Excessive losses initially prevented Monte Paschi from
opening after the shareholder vote, which increased the risk
that Italy's third-biggest bank could be nationalised. It later
partly recovered to trade 2 percent lower.
Craig Erlam, market strategist at Alpari, said many
investors expected the recent strong trend to continue into
January, although near-term trade would likely be muted.
"Trading volumes are expected to remain low for most of this
week, if not all of it, with another bank holiday coming on
Wednesday. Volumes on Monday and Tuesday should be particularly