* FTSEurofirst up 0.3 pct, Euro STOXX 50 index up 0.2 pct
* Traders hope for fresh ECB action to fight debt crisis
* BNP Paribas rises 1.9 pct after Q2 results
By Sudip Kar-Gupta
LONDON, Aug 2 (Reuters) - European shares rose on Thursday, helped by gains in blue-chip bank stocks ahead of a European Central Bank meeting which traders are hoping will result in fresh stimulus measures to fight the region’s debt crisis.
The FTSEurofirst 300 index was up 0.3 percent at 1,070.84 points, while the Euro STOXX 50 index advanced by 0.1 percent to 2,336.40 points.
Equity markets rallied last week following a pledge from ECB chief Mario Draghi to do whatever it takes to save the currency bloc from the effects of the spreading crisis.
There has been uncertainty over how concrete the measures that the ECB unveils later in the day will be.
Expectations that the central bank will announce steps to lower the borrowing costs of Spain and Italy, with a resumption of the central bank’s stalled bond-buying programme viewed as most likely.
But hopes have been tempered by Germany’s opposition to allowing the ECB a more interventionist role, or giving the euro zone’s future ESM rescue fund a full banking licence that would let it borrow from the ECB to fund government bond purchases.
“Clearly, the market continues to bet on some bold policy move to be announced at the ECB meeting and, therefore, the risk of disappointment is running high,” Credit Agricole-CIB said in a note.
“They’ve got to announce resuming their bond purchases,” added Darren Easton, director of trading at London-based Logic Investments. “But we need to see more decisive action over how they’re going to resolve some of the longer-term issues. We still favour selling into the rally.”
Banks were among the best-performing European equity sectors, with the STOXX European banking index rising 0.4 percent after France’s BNP Paribas reported a smaller-than-expected drop in profits that sent its shares up by 1.9 percent.
The Swiss-listed shares of oil drilling contractor Transocean rose 4.5 percent to make it top the FTSEurofirst 300’s leaderboard after it reported higher-than-expected revenues.
But many traders were opting to hold off from taking on positions until the ECB meeting was over.
“Lots of people are sitting on the sidelines, waiting for more clarity,” said Adrian Slack, head of equities at Bastion Capital, who added he would look to sell the Euro STOXX 50 index at 2,420 points if it rose further.
Emanuel Arbib, who heads up fund management firm Integrated Asset Management, said he was keeping his allocations evenly weighted between equities and bonds but was cautiously confident over the outcome of the ECB meeting.
“We are cautiously optimistic that the ECB will not disappoint, so we are keeping allocations steady between equities and fixed income,” said Arbib.