LONDON, Oct 1 (Reuters) - European shares rose early on Wednesday, led by banks on hopes that the U.S. Senate will pass a new version of a $700 billion bailout package for the embattled financial sector later in the day.
By 0715 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,070.94.
Banking stocks were the main gainers on the index. Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), UniCredit (CRDI.MI: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz) and HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) were 0.7-6.2 percent higher.
The U.S. Senate will vote on Wednesday night on a new version of the $700 billion bailout package for Wall Street, rekindling hopes that the credit crisis can be stemmed before claiming yet more banks and causing further damage to the global economy. [ID:nSP361078]
"The market is all about confidence and investors need to just hang in there and not be swayed by different rumours. The worrying sign is that it is based on no more than a hopeful optimism without much basis to it at the moment," said Justin Urquhart Stewart, director at Seven Investment Management.
"This is the eye of the storm until we wait for the decision from the U.S. Senate and see how the restructuring takes place."
The mining sector gained as copper
BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz) was up 3 percent and Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) was 7 percent higher after Australia's competition watchdog cleared BHP's proposed around $114 billion bid for Rio, saying it was unlikely to substantially lessen competition. [ID:nSYU005209]
Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz) slumped 27.5 percent after Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) said it would not make a formal offer for the group. Xstrata was up 9.9 percent. (Reporting by Joanne Frearson)
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