* Italy's FTSE MIB outperforms as Renzi wins EU vote
* Pro-EU forces keep majority after European election
* French CAC lags, Germany's DAX hits record high
* London, New York closed for public holiday
By Atul Prakash
LONDON, May 26 European equities advanced in
thin trading on Monday, with Italian shares outperforming the
regional market after voters endorsed Prime Minister Matteo
Renzi's centre-left Democratic Party's reforms in European
Results from around the 28-nation bloc showed pro-European
centre-left and centre-right parties will keep control of around
70 percent of the 751-seat EU legislature, but the number of
Eurosceptic members will more than double.
"People were afraid that Eurosceptic parties would emerge as
big winners. In some countries they are big winners, but the
outcome is not as bad as feared," Koen De Leus, senior economist
at KBC, in Brussels, said. "For example, election results from
Italy suggest that Renzi would be able to continue his reforms."
Italy's FTSE MIB rose 3 percent, outpacing other
major European indexes, boosted by gains in domestically focused
banks including UBI Banca and BP Milano, up
5.5 percent and 6 percent respectively.
In Germany, Chancellor Angela Merkel's conservatives won the
most votes in the elections, helping the benchmark DAX index
to climb to a new record high of 9,876.10 points. The
index was up 1.1 percent at 9,869.43 by 1307 GMT, while the euro
zone's blue-chip Euro STOXX 50 gained 0.9 percent.
However, in France, the anti-immigrant and anti-euro
National Front party topped the vote, in what French Prime
Minister Manuel Valls described as a political "earthquake."
France's CAC-40 was up 0.5 percent, lagging the overall
Francois Savary, chief investment officer at Swiss bank
Reyl, said that while the French EU vote result showed the
country's political difficulties, it should not affect the stock
market too much, since many CAC companies make much of their
money outside France.
"The EU vote says a lot about the difficulties that France
is in. But we still have some great stocks and great export
companies on the CAC-40," he said.
Michel Juvet, chief investment officer at Swiss bank
Bordier, said that while the rise of Eurosceptic parties could
be unsettling for some, it could also put even more pressure on
the European Central Bank to unveil measures next month to
support the region's economic recovery.
Expectations of new ECB action in June, including interest
rate cuts, have helped prop up European stock markets.
ECB President Mario Draghi said on Monday the central Bank
must be "particularly watchful" for any negative price spiral
taking hold in the euro zone, adding the bank was not resigned
to inflation being too low for too long.
Trading volumes were low as the London and New York markets
were closed for a public holiday. Volumes on the Euro STOXX 50
index were 47 percent of its 90-day daily average in late
Among individual sharp movers, Bull surged 21.7
percent on news Atos will buy the company in an
all-French IT sector deal worth 620 million euros ($845
million). The deal will create the top Europe-based cloud
computing company. Atos shares were up 5.4
Of the fallers, Getinge lost 9.4 percent after
the Swedish medical technology firm postponed a planned update
to investors as a result of discussions with the U.S. Food &
Drug Administration (FDA) related to quality issues at its
Medical Systems unit.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Sudip Kar-Gupta and Francesco Canepa;
editing by Keiron Henderson and Susan Thomas)