* FTSEurofirst 300 index up 0.8 percent
* Financial stocks lead market rally
* Expectations that c.banks will act on Greek vote fallout
By Sudip Kar-Gupta
LONDON, June 15 (Reuters) - European shares rose on Friday
as expectations that central banks would intervene to deal with
the risk of a Greek exit from the euro zone led to a recovery in
financial stocks, which have fallen sharply on worries over
their exposure to Greece.
However, many traders remained wary ahead of the Greek
election on June 17, which could determine the country's future
within the euro zone currency bloc, and said the equities market
rally could be a short-lived one.
The FTSEurofirst 300 index rose 0.8 percent to
991.96 points by 1030 GMT. Germany's DAX rose 1 percent
while France's CAC-40 index advanced by 1.6 percent.
Volumes, however, remained relatively thin as many investors
opted to stay on the sidelines ahead of Sunday's Greek vote.
Volumes came in at 77 percent of the average 90-day volume for
the FTSEurofirst index, and at around 50 percent for the DAX.
"The appetite for risk in this market is not high," said
Toby Campbell Gray, head of trading and risk at Tavira
Securities, adding that his firm had recently sold the Spanish
IBEX, Italian FTSEMIB and DAX indexes.
Financial stocks rose sharply after officials from G20
nations told Reuters that central banks were ready to take steps
to stabilise markets, if needed, by providing liquidity and
preventing any credit squeeze after Sunday's Greek election.
The STOXX European banking index rose 1.5 percent,
although the index remains down by around 2 percent since the
start of 2012.
DECLINING EARNINGS MOMENTUM
Deutsche Bank said in a research note that European shares
also faced the risk of lower earnings from the region's
companies, adding that the STOXX European industrials sector
and the travel sector looked particularly
vulnerable in the current climate.
Securequity sales trader Jawaid Afsar said he would be
tempted to sell off shares later on Friday, in order to minimise
any hits to portfolios in case of any unforeseen outcomes from
the Greek election.
"If you're already in the rally, you should use the rally to
start closing out your positions to reduce the risk ahead of
Sunday," he said.
However, ClairInvest fund manager Ion-Marc Valahu said he
had bought the Italian FTSEMIB and Spanish IBEX indexes this
He said the possibility that authorities might inject new
funds into the banking system to deal with Europe's debt crisis
meant he would not take out too many "short" positions - namely
trades that bet on a further fall in markets.
"I'm not excessively positive but I don't want to be too
short going into this market," he said.