* STOXX up 0.15 pct, FTSE flat
* Italian banks lag sector on rescue talk
* RWE, E.ON extend gains
* Vodafone goes ex dividend
(Adds details, updates prices)
By Danilo Masoni and Stephen Jewkes
MILAN, June 8 European shares steadied on
Thursday helped by stronger bank stocks and a bounce in oil
prices but caution dominated as Britons vote in a general
election and the European Central Bank holds its policy meeting.
The STOXX 600 rose 0.15 percent with financials
providing the biggest lift but weighed down by weaker telecom
shares, while Britain's blue chip FTSE index was flat.
The pan-European benchmark has struggled since hitting a 21-
month high in May with investors seeking fresh catalysts after a
rally fuelled by strong earnings and record inflows.
On Thursday the congressional testimony in the U.S. from
ex-FBI director James Comey, who was fired by President Donald
Trump last month, will also keep investors on the edge.
"Markets are longing for more certainty, which will be
needed in order to post the next leg higher. Today and tomorrow
certainly have the potential to provide traders with a clearer
outlook what the UK, the US and the Euro-zone is concerned,"
said Markus Huber, a trader at City of London Markets.
The ECB is expected to leave policy unchanged later today as
inflation remains below its target despite stronger economic
growth in the euro zone.
In Britain, opinion polls on Wednesday showed that Prime
Minister Theresa May was on course to increase her majority in
parliament in Thursday's election, helping the sterling.
Bank stocks rose for a second day following
the swift rescue of Spain's Banco Popular by bigger
rival Santander, but Italian banks were under pressure
on reports they could join the state in the rescue of troubled
regional lenders in the Veneto region.
A source familiar with the matter said Rome was putting
pressure on heavyweights Intesa SanPaolo and UniCredit
to take part so that other banks would follow their
example. Intesa was down 1 percent and UniCredit was flat.
The broader euro zone bank index gained 1 percent.
"The important thing is to get a solution fast and remove
the uncertainty," Stefano Fabiani, fund manager at Zenit said.
"Santander wobbled a bit early yesterday but then it went
positive. And it’s the same thing here."
Santander in Madrid rose 2.2 percent.
Utilities also rose with RWE and E.ON
rose 0.3 and 1.7 percent respectively adding to their rally in
the previous session after a nuclear energy tax which penalised
them was scrapped.
French credit insurance company Euler Hermes rose
2 percent following a report that Allianz is exploring
a buyout of its smaller rival. Allianz also rose by 1 percent.
Biggest weight to the STOXX index was Vodafone, down
3.7 percent, as the stock went ex dividend. Its fall dragged the
European telecoms index down 0.8 percent, making it the
biggest sectoral loser in Europe.
(Reporting by Danilo Masoni; Editing by Tom Heneghan)