* FTSEurofirst 300 up 0.3 pct, Euro STOXX 50 rises 0.2 pct
* Expectations of ECB action lifts European stock markets
* Solvay surges 8 pct, St Gobain falls over 10 pct
By Sudip Kar-Gupta
LONDON, July 27 European shares rose in choppy
trade on Friday, with Belgian chemicals group Solvay
among the top performers, as fresh signs that the European
Central Bank might step in to battle the region's debt crisis
boosted weakened equity markets.
The FTSEurofirst 300 index rose 0.6 percent to
1,049.25 points, while the Euro STOXX 50 index rose
by around 1 percent.
Trading was volatile, with many investors still uncertain
over whether Europe's political leaders will be able to agree on
steps to prevent the crisis from engulfing Spain and Italy.
The FTSEurofirst at one stage fell to 1,039.29 points,
before recovering after French newspaper Le Monde reported that
euro zone governments and the ECB were preparing to intervene on
financial markets to bring down Italian and Spanish borrowing
"We've got a bit of breathing space for the markets, but to
my mind, the outlook is still rather gloomy and the bias is
towards the downside," said Mike Turner, European equity options
broker at XBZ Ltd.
The FTSEurofirst's rebound on Thursday followed a fall of
more than 4 percent over the previous four trading sessions, and
the index could still end the week in negative territory after
seven straight weeks of advances.
SOLVAY SOARS WHILE ST GOBAIN SINKS
Belgian company Solvay was the best-performing stock on the
FTSEurofirst 300 index, rising 8.3 percent after it stuck to its
full-year forecasts, but French construction group St Gobain
slumped more than 10 percent after issuing a bleak outlook.
Traders and investors warned the European stock market rally
could be short-lived, given that European policymakers have
previously disagreed on the details of how to combat the
region's sovereign debt crisis.
On Friday, Germany's Bundesbank dampened expectations for
further action by the ECB by upholding its resistance to the ECB
buying bonds, and the region's economic woes were further
highlighted by record unemployment figures in Spain, whose
struggle to generate growth is at the heart of its budget
Adrian Slack, head of equities at Bastion Capital, remained
cautious over the rally, saying he would cut exposure to stocks
on the back of any sudden move upwards.
Slack said he would look to sell the Euro STOXX 50 index at
2,322 points, and Germany's DAX at 6,780 points.
"I'm still a seller into the rally. He's (Draghi) got to do
it within the framework of the European Union, and it hasn't
worked so far," he added.