* FTSEurofirst 300 up 0.3 pct, resumes 1-1/2 week rally
* Banks turn positive after strong results from JPMorgan
* Greek banks jump on merger hopes after Piraeus's moves
* Glaxo up as U.S. panel votes to keep Avandia on the market
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, July 15 (Reuters) - European stocks rose on Thursday
as strong results from JPMorgan Chase & Co <JPM.N> helped the
market bounce back from early losses and resume its 1-1/2 week
rally.
Kicking off the quarterly earnings season for U.S. banks,
JPMorgan reported a sharp rise in second-quarter profit after
setting aside less money for loan losses. []
"JPMorgan once again exceeded expectations. The pattern is
the same as the last two quarterly results: The investment bank
is a well-engineered profit machinery, while there are still
problems in their consumer lending business with charge-offs and
delinquencies," said Christian Tegllund Blaabjerg, chief equity
strategist at Saxo Bank in Copenhagen.
"That said the loan-loss reserves continue to be reduced,
which indicates that JPMorgan is on the right path to recovering
this part of the business."
At 1115 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.3 percent at 1,047.82 points, while the
Euro STOXX 50 <>, the euro zone's blue chip index, was
up 0.2 percent at 2,744.27 points.
The blue chip index moved above 2,737.62, its key 50 percent
retracement level of a move from its April high to its June low.
The STOXX Europe 600 banking index <.SX7P> reversed early
losses and turned positive, with UBS <UBSN.VX> among the biggest
gainers, up 0.4 percent.
CONSOLIDATION WAVE
Greek banks <.FTATBNK> rose 6 percent after Piraeus Bank
<BOPr.AT> offered to buy stakes in ATEbank <AGBr.AT> and
Hellenic Postbank, sparking hopes of a consolidation wave in the
country's banking sector that has been hammered over the past
nine months by fears about the country's debt crisis.
The Greek bank index is still down 60 percent since
mid-October 2009.
Around Europe, UK's FTSE 100 index <> was up 0.1
percent, Germany's DAX index <> up 0.3 percent, and
France's CAC 40 <> up 0.2 percent.
The FTSEurofirst 300 has jumped some 8 percent since July 5,
following a two-week sell-off. "I get the feeling that there
remains a lot of cash sitting on the sidelines that missed the
move higher over the last seven days," City Index strategist
Joshua Raymond wrote in a note.
"If companies' earnings continue to outperform, there is
every chance that this will provide the cherry to entice that
cash back into the market which could help drive indices higher.
But in truth, that is a big 'if'."
Investors' risk appetite continued to grow on Thursday
despite a lack of clear direction in equities, with the VDAX-NEW
volatility index <.V1XI>, Europe's main barometer of investor
anxiety, falling 4.7 percent to a 2-1/2 month low.
GlaxoSmithKline <GSK.L> climbed 2 percent in a relief rally
following a U.S. panel of health experts vote to keep the
drugmaker's diabetes pill Avandia on the market but with new
warnings on heart risks.
But Glaxo's rise was limited by news of a hefty 1.57 billion
pound ($2.4 billion) legal charge for Avandia and other
long-standing legal cases. []
(Editing by David Holmes)
