* Athens shares jump as a snap election is called
* Pro-Europe vote limits nationalist gains in EU election
* Auto stocks outperform on Fiat Chrysler-Renault merger
talks
* Volumes thin with UK, U.S. markets closed for holidays
(Recasts, updates to close, adds quote on Greek stocks,
graphic)
By Aaron Saldanha
May 27 (Reuters) - European shares rose on Monday, led by
car-makers after Fiat Chrysler and Renault confirmed they were
in talks to merge, while broader trading was mainly driven by
regional politics.
The STOXX 600 index .STOXX rose 0.2%, with most countries'
bourses posting gains after results of European parliamentary
elections showed strong support for pro-European Union parties.
However, with UK and U.S. markets closed for holidays,
liquidity was shallow and STOXX 600 trading volumes were the
lowest seen since late August.
The calling of a snap election by Greek Prime Minister
Alexis Tsipras boosted sentiment after the ruling leftist Syriza
party endured a heavy defeat in the European election.
Athens-traded stocks .ATG surged 6.1%, for their best day
since February 2016, on hopes that a new government would be
more business friendly than the current one.
"The Greek market had not followed the valuation re-rating
of European markets post 2015 given the radical nature and
rhetoric of the government that we had in place," said Nick
Koskoletos, head of equity research at Eurobank Equities in
Athens.
"The prospect of a more pro-business government and enhanced
investor prospects in Greece is helping the market play catch
up."
Trading volumes in Greek stocks, which were already Europe's
best performers in the year to Friday's close, were more than
three times their 90-day average.
Austrian stocks .ATX recovered from earlier losses to end
flat on the day after Chancellor Sebastian Kurz's government was
ejected from office in the aftermath of a video sting scandal.
Fiat Chrysler FCHA.MI pitched a finely-balanced merger of
equals to France's Renault RENA.PA in an attempt to create the
world's third-largest automaker, sending the two companies'
shares up 8% and 12.1%, respectively. The auto and parts makers
index .SXAP rose 1.4%. "For Fiat, which has never invested in 'green', it can be a
way to tie-up with someone who already has an electric mass
market presence," said a trader at a European bank.
Peugeot S.A. PEUP.PA fell 3.3%, a move some analysts put
down to Fiat preferring to seek a merger with Renault.
Stocks in Milan .FTMIB dipped 0.1%, led by a 1.3% fall in
the local banking index .FTIT8300 after a report said Brussels
was considering disciplinary action over Rome's failure to rein
in public debt.
UniCredit CRDI.MI fell 2.3% to its lowest close in more
than three and a half months.
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