Europe stocks rise; ECB keeps rates at 1 percent

                                
 * FTSEurofirst 300 index up 0.6 percent
                                
 * Banks gain, miners up
                                
 * Pernod Ricard falls, predicts tough year
                                
 By Joanne Frearson
                                
 LONDON, Sept 3 (Reuters) - European shares remained firm in
afternoon trading on Thursday, led higher by banks and miners,
with investors ignoring the European Central Bank's decision to
hold interest rates at 1 percent as expected.
                                
 By 1211 GMT, the pan-European FTSEurofirst 300 <.FTEU3>
index of top shares was up 0.6 percent at 955.70 points. The
index is up around 47 percent since reaching a lifetime low in
early March and is about 14 percent higher for the year.
                                
 The European Central Bank kept interest rates unchanged,
moving attention to President Jean-Claude Trichet's view of the
fledging euro zone recovery and new ECB economic projections.
[ID:nL3374378]
                                
 "The decision by the ECB was expected, so the market did not
take that much significance from it. There are not much volumes
going through and there is little to get excited about," said
Mark Foulds, senior trader at ETX Capital.
                                
 Banks added most points to the index. Deutsche Bank
<DBKGn.DE> gained nearly 2.4 percent following market talk it
might increase its holding in retail bank Deutsche Postbank
<DPBGn.DE>. [ID:nWEA9262]
                                
 Deutsche Bank <DBKGn.DE> denied the rumour.
                                
 Banco Santander <SAN.MC>, UBS <UBSN.VX> and Fortis <FOR.BR>
were up 2.3-6.1 percent.
                                
 MINERS GAIN
                                
 Miners were higher as metal prices rose, with copper
<MCU3=LX> up 1.1 percent, aluminium <MAL3=LX> 0.8 percent
higher, and nickel <MNI3=LX> gaining 2.3 percent.
                                
 Anglo American <AAL.L>, Fresnillo <FRES.L>, Eurasian Natural
Resources Corporation <ENRC.L>, Rio Tinto <RIO.L> and Xstrata
<XTA.L> were up 1.8-6.1 percent.
                                
 Oil groups were among the worst performers on the index. BP
<BP.L> fell 1.1 percent following a gain of 4.3 percent on
Wednesday when it announced a major oil find in the Gulf of
Mexico.
                                
 Among individual stocks, Pernod Ricard <PERP.PA> lost 4.1
percent after the group predicted a tough year as the drinks
market stagnates. [ID:nL3320454]
                                
 Shares in BASF <BASF.DE> were down 2.9 percent after Nomura
downgraded its stance on the company to 'reduce' from 'neutral'.
                                
 Also giving support to the market was news the euro zone
services economy jumped back almost to recovery in August, with
Germany powering back to growth and France a fraction away, a
PMI survey showed. [ID:nL3380964]
                                
 "This really supports the case that this is a broad economic
recovery, still dependent on the stimulus of monetary and fiscal
policy, but it looks like we are on safer ground with regards to
recovery in the euro area," said Juergen Michels at Citi.
                                
 Across Europe, the FTSE 100 <.FTSE> index was up 0.3
percent, Germany's DAX <.GDAXI> was up 0.6 percent and France's
CAC 40 <.FCHI> was 0.4 percent higher.
 (Reporting by Joanne Frearson; Editing by Dan Lalor)