Mining stocks lead European equity recovery
* FTSEurofirst up 1.1 pct, Euro STOXX 50 rises 1.5 pct
* Equities recover after sharp sell-off on Thursday
* Fears over Italy, central bank help seen short-lived
* Tenaris tops FTSEurofirst 300 after higher profit
* Bargain-hunting investors scoop up mining stocks
By Sudip Kar-Gupta
LONDON, Feb 22 (Reuters) - European shares were higher at midday on Friday, led by miners, on expectations that worries over the result of Italy's election this weekend would be short-lived.
Most investors expect a centre-left government headed by Pier Luigi Bersani and backed by current prime minister Mario Monti to win and continue with reforms to fix Italy's economic problems.
The pan-European FTSEurofirst 300 index was up 1.1 percent at 1,163.98 points at mid-session, having fallen 1.5 percent in the previous session.
The euro zone's blue-chip Euro STOXX 50 index rose 1.5 percent to 2,617.50 points, having fallen 2.3 percent in the previous session to a fresh 2013 low.
All equity sectors were in positive territory, with the STOXX Europe 600 basic resources index - which comprises major mining stocks - leading the way with a 1.7 percent rise.
Stock markets fell earlier this week over worries the U.S. Federal Reserve may curb monetary stimulus measures, and on uncertainty over the results of elections next week in Italy, which has been hit hard by the euro zone's debt crisis.
However, data on Friday showing a rise in German business morale, and expectations that Italy will choose a government committed to tackling its debt problems, reassured investors that any post-Italian election market dip would be short-lived.
"The main trend is still intact. After yesterday's painful session, European equities managed to reverse losses and are rallying nicely," said Gekko Markets sales trader Anita Paluch.
"With this 'risk-on' attitude, people are jumping on the train to pick up bargains such as the miners," she said.
Italy's FTSE MIB equity index recovered from a 3.1 percent fall on Thursday to rise 1.4 percent, with Milan-listed steel pipe maker Tenaris topping the FTSEurofirst 300 with a 4.5 percent gain after posting higher profit.
A resurgence by former leader Silvio Berlusconi has caused doubts over the outcome, and led investors to avoid taking big positions on European equities ahead of the election result early next week.
Matthias Thiel, a market strategist at M.M Warburg & Co, said failure to form a stable, reform-oriented government in Italy would lead his firm to review its positive stance on equities.
"Italy would be a specific example of what we mean by political risk. If there are signs that political risk materialises or the fundamentals get worse again, we would reduce our position," he said.
The majority of equity strategists and investors expected any market decline caused by worries over Italy to be relatively short-lived and minor, and for equity markets to hold onto their upwards trajectory going into late March and April.
The FTSEurofirst 300 index is up 2 percent this year.
BTIG equity strategist Nick Xanders said markets could remain volatile in the near term and he backed buying volatility options, with the Euro STOXX 50 Volatility index reaching a fresh 2013 high earlier this week. "Volatility is still cheap and the risks are still skewed to the downside."
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