* FTSEurofirst 300 closes up 0.9 pct at 1,103.05 points
* Euro STOXX 50 ends up 1.5 pct at 2,515.99 points
* Thin volumes with U.S. markets shut after massive NY storm
* BP up after dividend hike, UBS surges after job cut plan
LONDON, Oct 30 (Reuters) - Reassuring business updates from oil major BP and several major banks lifted European shares on Tuesday, with a key European equity index reaching its highest in more than a week.
However, traders said near-term direction would be influenced in part by what U.S. investors do when markets in New York reopen after a two-day closure due to a massive storm, which caused widespread damage on the country's eastern coast.
The FTSEurofirst 300 index closed up 0.9 percent at 1,103.05 points, its best close since ending at 1,107.42 points on Oct. 22. The euro zone's blue-chip Euro STOXX 50 index rose 1.5 percent to 2,515.99 points.
Trading volumes on the FTSEurofirst 300 were among the lowest so far this year, as a result of the disruption caused by the storm in America.
BP gained 4.2 percent after raising its dividend, while Swiss bank UBS surged 5.9 percent as investors welcomed UBS' plans to axe 10,000 jobs, which they said would save costs and could help UBS return capital to shareholders.
Dr Moustapha Awada, who heads up London quantitative trading firm Sunofia Advisers, said he remained cautious on European equities until the end of 2012 but was betting on further minor gains for regional stocks in the near term.
``Systematically we have a slightly 'long' bias, but that could change depending on the volatility and liquidity the markets will exhibit in the short term. I think Europe is still in a crisis situation but there's still some positive momentum in Europe,'' he said.
WORRIES OVER EARNINGS AND EURO ZONE LINGER
Deutsche Bank performed well along with UBS, rising 4.5 percent after posting higher profits.
JN Financial investment manager Ed Smyth holds Deutsche Bank shares and bought shares in Italy's Banca Monte dei Paschi di Siena on Tuesday.
``That Italian bank looks quite oversold in the short-term,'' he said.
Banca Monte dei Paschi di Siena has had to accept state aid, with many of Europe's top companies still under pressure from the region's sovereign debt crisis, which has hit Spain and Greece hard and could threaten Italy next.
Italian carmaker Fiat fell 4.7 percent after cutting its 2013 and 2014 targets, and according to Thomson Reuters Starmine data, 47 percent of companies on the European STOXX 600 index to have posted third-quarter results have missed market expectations.
Michel Juvet, chief investment officer at Swiss bank Bordier, said he remained ``underweight'' on European equities.
However, Lloyds TSB private banking head of investments Ashish Misra said European equities could represent a better pick that U.S. stocks.
The U.S. market faces uncertainty with the Presidential elections next month and a potential ``fiscal cliff'' of big spending cuts and tax increases in 2013 if the U.S. government fails to reach a deficit reduction deal by the end of 2012.
``In terms of their price, European equities are now trading at just over 30 per cent discount in terms of price-to-book value ratios relative to U.S. equities,'' said Misra.
``This trend of relative under-performance - now nearly two years old - has likely grown a little long in the tooth and does raise the possibility of a period in which European equities out-perform their U.S. counterparts,'' he added.