Prospects of central bank support lift European shares

LONDON, Feb 28 (Reuters) - European shares rose on Thursday as investors took heart from fresh signs that central banks would continue steps to support the world economy.

The pan-European FTSEurofirst 300 index was up by 0.4 percent at 1,165.47 points while the euro zone's blue-chip Euro STOXX 50 index advanced 0.6 percent to 2,626.55 points.

The index continued a recovery from losses earlier this week, caused by Italy's political deadlock.

Austrian bank Erste topped the FTSEurofirst 300 with a 3.5 percent gain after reporting that it was targeting a stable operating profit result for 2013.

Plans by central banks to inject liquidity into markets have propped the global economy and equity markets, and the European Central Bank's (ECB) head Mario Draghi reiterated this week that the ECB would continue with such measures.

However, some traders saw any further gains on equity markets as being relatively limited, due to worries over Italy and looming U.S. budget cuts due to kick at the start of March.

"I think markets will be choppy and rangebound this coming month," said Central Markets chief strategist Richard Perry.

"I don't think it will break much higher, and if anything it could break lower."