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STOXX up 0.6%, banks lead gains

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Ericsson slips after $1.09 billion impairment

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UK election results awaited

(Updated at 1615 GMT)

By Jesus Calero, Shubham Batra and Shristi Achar A

July 4 (Reuters) - European shares rose on Thursday amid

optimism around U.S. interest rate cuts following soft economic

data, while London markets gained as voting began in the UK

general election with polls predicting a historic victory for

the Labour party.

The pan-European STOXX 600 index rose 0.6% to a

more one-week high.

Britain's FTSE 100 advanced 0.8%, with markets

waiting to see how large a majority the Labour Party might win.

"The UK outcome, widely expected to be a Labour victory,

won't have much impact unless there's a big upset or surprising

outcome, as markets have likely already discounted this," said

Bas van Geffen, senior macro strategist at Rabobank.

French stocks advanced for a second day with a 0.8%

rise amid intensified efforts by opponents of France's National

Rally (RN) to prevent the far-right party from gaining power.

An opinion poll on Thursday showed RN is expected to fall

short of an absolute majority in the second round of a

parliamentary election on Sunday.

The European lenders sub-index, which includes

French lenders such as Societe Generale and BNP

Paribas, gained on the news, up 1.3% and leading

sectoral gains.

Weak U.S. data boosted sentiment on the likelihood of

Federal Reserve rate cuts. First-time applications for U.S.

unemployment benefits increased last week, indicating a cooling

labour market.

In Europe, German industrial orders fell unexpectedly in

May, while another report showed Swiss inflation fell last

month, encouraging markets to shorten their odds that the

central bank will cut interest rates again later this year.

"Today's headlines may create dovish risk, but the

stickiness in services and domestic inflation at the high end of

the (Swiss National Bank)'s target corridor or above may be a

concern," strategists at Citigroup noted.

Meanwhile, European Central Bank policymakers were mostly

confident that inflation would continue to fall but some felt

uneasy about cutting interest rates last month given a slew of

negative surprises, the accounts of their meeting showed.

Among individual stocks, Britain's Smith & Nephew

rose 6.8% after activist investor Cevian Capital disclosed a 5%

stake in the medical equipment maker.

France's Pluxee fell 9.2% after the voucher and

benefits company reported weaker-than-expected third-quarter

sales in Europe on Wednesday.

Sweden's Ericsson slipped 1.2% after the telecoms

equipment maker recorded another impairment charge of 11.4

billion Swedish crowns ($1.09 billion) in the second quarter of

2024.

Trading volumes were low on account of a public holiday in

the United States.