* FTSEurofirst 300 up 0.4 pct, Euro STOXX 50 up 0.6 pct
* Bullish triangle pattern shapes up on Euro STOXX chart
* Banks rally as BNP pleases with forecast-beating earnings
By Blaise Robinson
PARIS, Nov 7 (Reuters) - European stocks rallied early on Wednesday as the re-election of U.S. President Barack Obama fuelled expectation the Federal Reserve's loose monetary policy will continue.
Banking stocks were among the biggest gainers after France's BNP Paribas pleased investors with forecast-beating quarterly earnings. BNP was up 4.7 percent, Societe Generale up 2.7 percent and Credit Agricole up 1.6 percent.
At 0900 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,119.38 points, after hitting a two-week high of 1,120.30.
Despite Obama's victory, the balance of power in the U.S. Congress stayed mostly unchanged, keeping intact the risk of a standoff in the "fiscal cliff" talks.
If a deal is not reach, about $600 billion in spending cuts and tax increases are set to be automatically triggered at the end of the year, which investors fear will derail the U.S. recovery.
"(Obama's victory) certainly brings visibility on U.S. policy, which is positive for markets. Now the focus moves on to the fiscal cliff," a Paris-based equity and exchange-traded fund trader said.
"With no big shift of power in Congress, will Obama manage to get a deal? That's the question."
Around Europe, UK's FTSE 100 index was up 0.3 percent, Germany's DAX index up 0.4 percent, and France's CAC 40 up 0.7 percent.
The euro zone's Euro STOXX 50 index was up 0.6 percent at 2,550.76 points, but was losing steam after hitting a strong resistance level representing the descending trendline formed by September and October highs.
The chart for the blue-chip index shows a bullish symmetric triangle pattern shaping up since mid-September, with the index trading in a tightening range, signalling that a break above the triangle could quickly send the index rallying to March levels.
Aurel BGC chartist Gerard Sagnier warned however that trading volumes have been too anaemic to confirm any technical patterns at the moment.
"European indices are in triangles started in mid-September, but there's isn't much visibility and volumes are minimal," he said.
"I think that the trend for the last part of the year, if we get one, will come from the S&P 500. For now, this is still a neutral market."
Spanish telecoms company Telefonica gained 1.8 percent after saying it expects to meet year-end targets and pledged to pay a dividend in 2013.