* FTSEurofirst 300 up 1.1 pct, hits near-4 wk intraday high
* Confidence boosted as Greece final vote passes
* Banks among top gainers
By Harpreet Bhal
LONDON, June 30(Reuters) - European shares hit their highest level in almost four weeks on Thursday after Greece’s parliament passed a final vote on austerity measures, boosting market confidence that the country can pay its bills in the short-term.
The Greek parliament approved detailed austerity and privatisation legislation, moving a step closer towards securing a 12 billion euro financial aid package from the European Union and the International Monetary Fund.
The pan-European FTSEurofirst 300 index of top shares closed 1.1 percent higher at 1,110.97 points, and hit its highest intraday level since June 3 at 1,110.45 points.
The Greek vote “draws a bit of a line in the sand for Greece in the immediate term, because it paves the way for the EU and the IMF to give them the next tranche of loans,” said Joshua Raymond, market strategist at City Index.
German financial institutions look set contribute 3.2 billion euros, although the details still have to be finalised, Germany’s finance minister said.
The Greek vote and emergence of German financials’ support for the bailout had “raised a degree of optimism that whilst the market has come off a lot over the last couple of weeks that maybe it’s a bit oversold and there’s a chance for some short-term buying momentum,” Raymond said.
The approval, however, is seen as a short-term solution for Greece, with credit markets still pricing in an 80 percent chance of Greece defaulting on its 340 billion euro debt mountain within five years.
“It seems that the immediate uncertainty has waned a bit but it’s by no means over at all. It’s one thing to pass austerity measures but it’s another thing to actually see the changes take place and that’s what the market will look towards,” Raymond said.
European banks rose, with the STOXX Europe 600 banking index up 2 percent.
UK bank Lloyds was up more than 9 percent, after its new boss announced plans to cut 15,000 jobs and halve its international presence to help revitalise the British bank.
The equity market also received a lift from upbeat U.S. data on business activity in the Midwest region which showed a better-than-expected reading in June.
A sharply better than expected Chicago PMI number added to equity market enthusiasm in the afternoon session, as did bullish comments from a top U.S. politician over U.S. debt-ceiling talks, a trader at a U.S. investment bank said.
Senate Democratic Leader Harry Reid said he would hold the chamber in session next week to work on a budget deal that would allow the country to keep paying its bills.
The oil sector also featured among the top performers, buoyed by BG Group , up 4.7 percent, after it upgraded its oil and gas reserves in Brazil’s Santos basin.
Among other individual shares, London Stock Exchange gained almost 11 percent after the bourses operator was forced to abort its $3.5 billion merger with Canada’s TMX Group , leading Numis Securities to upgrade its rating to “hold” from “reduce”.
Gains on the FTSEurofirst 300 on Thursday extended the index’s winning run into four straight days, but recent weakness has pulled the index into negative territory for the quarter, down 1.3 percent.
Some technical analysts believe that the market could succumb to more weakness before rebounding towards the second half of the year.
“We are still not convinced we have seen the lows within this correction in the development of an important bottom. This important bottom should be followed by a decent rally into the second half of this year,” said Roelof-Jan Van den Akker, senior technical analyst at ING.
Investors have become a little more upbeat heading into the second half of the year, lifting stock allocations from 2011 lows but remaining cautious with plenty of safe-haven cash and bonds. (Editing by Jane Merriman)