* FTSEurofirst up 2.2 percent
* Europe's blue chip bounce off technical support
* China rate cut hopes help miners
* ECB douses sentiment surrounding fresh LTRO
By David Brett
LONDON, June 6 (Reuters) - Riskier banking and mining stocks led a technical rally among Europe's top shares on Wednesday, as hopes of central bank action to beef up the euro zone economy remained despite the ECB resisting pressure to intervene in the short term.
The FTSEurofirst rose 2.2 percent, or 21.09 points, to close at 974.21, while Britain's FTSE, which is heavily weighted towards mining and banking assets, jumped 2.4 percent and Germany's Dax added 2.1 percent.
The FTSEurofirst bounced off the 100 percent Fibonacci retracement level of the LTRO rally which began in December, while Germany's benchmark index rebounded from an "oversold" position and London's blue chip index held within its tight range between 5,250 and 5,400.
"We have got a volatile path up until the Greek elections (on June 17), so I would not read too much into today's moves in isolation given the falls we've had," said Paul Kavanagh, a partner at Killik & Co.
"It feels to me (like a technical bounce) ... the big gains have been in risk-on stocks but I do not think anything fundamental has changed," Kavanagh said.
Basic resources stocks, up 5.2 percent, were the top performers, with UK-listed miners, such as Kazakhmy leading gainers as they were boosted by speculation of an interest rate cut in China and caught up with a two-day market rebound while UK markets were closed for a holiday.
Autos and parts makers, which rely on strong demand in Asia, were up 2.1 percent, with tyre maker Continental up 4.4 percent.
Rheinmetall surged 6.8 percent after Berenberg Bank upgraded the stock to "buy" from "hold" on expectations the German industrial group will win some significant defence orders in 2012 and on valuation.
There were hopes of further stimulus from the United States too as Atlanta Fed President Dennis Lockhart said the Federal Reserve may need to consider further monetary easing if a wobbly U.S. economy falters or Europe's crisis triggers a broader financial shock.
European banks, which have the largest exposure to the region's sovereign debt and economic woes, held in the 126-127 area, the sector's peak on May 22, against the backdrop of German and European Union officials urgently exploring ways to rescue Spain's debt-stricken banks.
There was some disappointment, however, as Europe's top share index briefly pared gains in mid-afternoon, before rallying in tandem with a strong U.S. open, after the European Central Bank put the onus firmly on euro zone governments to solve the bloc's debt crisis. That dashed expectations the central bank could take near-term action despite saying the currency area's economy was under increasing threat.
"We are building up to some kind of intervention but the ECB remains very wary of taking any action before the Greek elections," Keith Wade, chief economist and strategist at Schroders, said.
Wade said the current uncertainty in Europe has seen Schroders opt for a more defensive equity strategy focusing on high-quality names and avoiding peripheral Europe.
Strategists at JPMorgan Cazenove said: "... unless we see a meaningful policy announcement, we still think the trend remains down," and he expected further downside to euro dataflow.
The strategists called for an "overweight" stance on defensives such as telecoms and an "underweight" on cyclical stocks.
On the downside, UK-listed mobile telecoms firm Vodafone shed 2.7 percent as the market heavyweight's stock traded without the entitlement to its latest dividend.
Dutch supermarket Ahold, meanwhile, shed 4.2 percent after reporting weaker-than-expected earnings in the first quarter.