* 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 ended higher 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 elections.
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 3.6 percent, outpacing other major European indexes, boosted by gains in domestically focused banks including UBI Banca and BP Milano, up 6.8 percent and 7.2 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 9,893.81 points. The index ended 1.3 percent higher at 9,892.82, while the euro zone's blue-chip Euro STOXX 50 gained 1.2 percent.
Investors also felt relieved after Petro Poroshenko, a billionaire chocolate manufacturer, claimed the Ukrainian presidency with an emphatic election victory.
"This is a relatively benign European parliamentary result, with the worst fears over the weekend not being realised. With respect to Ukraine, there was a fairly decisive victory there," Simon Smiles, chief investment officer of ultra high net worth at UBS Wealth Management, said.
"The focus is more on looking forward to next week, with regard to what the ECB can actually announce ... Expectations are high for a rate cut, so unless the ECB announces something more unexpected, it's getting hard to see how the ECB can deliver a real surprise."
European Central Bank President Mario Draghi said on Monday the 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.
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 rose 0.8 percent, lagging the broader European stock market.
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.
Trading volumes were relatively low as the London and New York markets were closed for a holiday. Volumes on the Euro STOXX 50 index were 87 percent of its 90-day daily average.
Among individual sharp movers, Bull surged 22 percent on news Atos will buy the company in an all-French IT sector deal worth 620 million euros ($845 million). Atos shares rose 6.2 percent.
Of the fallers, Getinge lost 10.3 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 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 Lionel Laurent, Sudip Kar-Gupta and Francesco Canepa; editing by Susan Thomas)