* 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
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
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)