European shares rose in early trade on Thursday as investors bet on a rate cut from the European Central Bank and a bold plan from an EU summit to help resolve the euro zone debt crisis, Reuters reported. At 0924 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 992.33 points, near its highest in more than five weeks. Optimism that policymakers would successfully address the euro zone debt crisis, and last week's announcement that coordinated central banks action would provide cheaper dollar funding for European banks, has helped boost investor confidence. Stocks rose across the board, with the heavyweight banking sector among the biggest gainers. The STOXX Europe 600 Banking Index rose 0.6 percent, and has risen more than 13 percent in just over two weeks, on hopes the euro zone crisis will be resolved. But the index is down more than 30 percent in 2011, with banks having suffered writedowns on sovereign debt in the region. Banks will be in the spotlight as the European Banking Authority will indicate how much extra capital the region's banks will need to cope with the debt crisis, a key part of its plan to revive confidence in the bruised sector. EBA said details of the bank recapitalisation needs will be released at 1700 GMT. The European Central Bank is expected to cut rates to 1 percent and unveil a new package of bank aid on Thursday, with markets also watching for any hint it will intensify its bond buying support. The ECB decision is expected at 1245 GMT. France and Germany are to sound out European leaders about their plan to defuse the euro zone's debt crisis, eager to rally support before a high-stakes EU summit. The plans include tougher budget discipline. -- SPA
