* STOXX up 0.3 pct; Milan blue chips up 1 pct
* Banco Popular plunges on liquidation warning
* Inmarsat, SES boosted by takeover talk
* Akzo Nobel falls as PPG drops bid plans
(Recasts, adds details, updates prices)
By Danilo Masoni
MILAN, June 1 European shares inched up on
Thursday, with blue chips in Milan taking the lead after better
than expected Italian economic growth helped shrug off political
Italy's economy rose 0.4 percent in the first quarter thanks
to firm domestic demand, the statistics bureau said, sharply
raising a preliminary estimate and improving prospects for the
The pan-European STOXX 600 index was up 0.3
percent, while Italy's FTSE MIB rose 1.1 percent as it
extended gains after the GDP data release.
The data prompted renewed interest in Italian stocks after a
selloff earlier this week when investors were rattled by worries
over early autumn elections in the euro zone country and the
rescue of two ailing regional banks.
"The data is better than expected. It's good news," said
Prometeia economist Stefania Tomasini. "The recovery is helped
by an acceleration of household consumption while the slowdown
to investment was a disappointment."
Italian banks rose 1.2 percent, having been
among the hardest hit by this week's drop. UniCredit
rose 0.6 percent after HSBC raised its target on the stock on
optimism about the heavyweight lender's restructuring plan.
"The first quarter results were the first chance we got to
take a glimpse at execution with management able to tick all
boxes ... At the same time, core revenues continue to perform
well," HSBC analyst Jason Kepaptsoglou said in a note.
Elsewhere in the broader European banking sector, Spain's
Banco Popular plunged 16 percent after a top European
watchdog warned European Union officials that the Spanish bank
may need to be wound down if it fails to find a buyer.
Among the larger banks, Deutsche Bank fell 0.5
percent while Credit Agricole was up slightly.
Overnight, U.S. bellwethers JPMorgan and Bank of America both
warned of weak trading revenues in the second quarter which
pulled banking stocks sharply lower on Wall Street.
In London, strength in blue chip exporters helped the
benchmark FTSE 100 index inch back towards an all-time
Inmarsat gained 4.8 percent and France's SES
also rose sharply on speculation they could be
takeover targets following reports that Softbank would let its
planned $14 billion merger between satellite startup OneWeb and
Akzo Nobel fell 1.2 percent after U.S. rival PPG
Industries said it would not launch a formal bid for
Akzo after repeated informal offers were rejected.
BT Group fell 0.5 percent after a downgrade by Morgan
Stanley which raised concerns over the company's cash flows.
Online car retailer Auto Trader hit a record high
after Barclays upgraded the stock to "overweight." Its shares
were up 4.7 percent.
(Reporting by Danilo Masoni and Elisa Anzolin Additional
reporting by Vikram Subhedar; Editing by Susan Fenton)