European shares rise on ECB stimulus hopes; Infineon shines

* Pan-European FTSEurofirst 300 index up 0.4 percent

* Infineon (Xetra: 623100 - news) soars after results, dividend beat expectations

* BHP Billiton (NYSE: BBL - news) underperforms miners after downgrade

* Auto sector in demand led by Volkswagen (LSE: 0P6N.L - news) (Adds details,)

By Danilo Masoni

MILAN, Nov 26 (Reuters) - European shares rose on Thursday, helped by growing expectations of aggressive European Central Bank action next week, while a solid quarterly report from chipmaker Infineon and a rebound in metal prices also provided support.

The pan-European FTSEurofirst 300 index was up 0.38 percent by 0930 GMT after gaining 1.4 percent on Wednesday , while the Euro STOXX 50 was up 0.53 percent.

"Expectations surrounding the ECB are running very high and this is driving European markets higher, weakening the euro and helping them do better than U.S (Other OTC: UBGXF - news) . stocks," said Marco Vailati, head of research and investment at Italy's Cassa Lombarda.

"I think and hope the ECB will not disappoint but I realise that it won't be that easy," he said.

Infineon climbed 12 percent after the auto and industrial chip maker posted higher-than-expected quarterly operating result and promised a revenue rise for its latest financial year at the high end of analysts' expectations.

"Infineon has proven surprisingly resilient and is executing very well," said Bernd Laux, an analyst at Kepler Cheuvreux, keeping his "Hold" recommendation. "Based on its new guidance, the shares are not expensive any more."

The company also proposes a dividend increase to 0.20 eur/share, also higher than expected.

Remy Cointreau (Swiss: RCO.SW - news) fell 2.6 percent after the French spirits group reported a 7.3 pct fall in like-for-like current operating profit for the first half, reflecting soft Chinese demand for its premium cognac.

Still in the drinks sector, Royal UNIBREW (LSE: 0R6Z.L - news) rose 11 percent after the Danish drinks company reported quarterly results above analysts' expectations and raised its medium-term core profit target.

Abengoa (LSE: 0NUI.L - news) shares slumped for a second day as the renewable energy firm continued insolvency proceedings after a potential investor backed out of a 350 mln euro deal to recapitalise the company. After wiping out half of its market value on Wednesday the stock was down 14 percent.

Most sectors however were in positive territory.

Mining stocks were among the top sectoral gainers with a rise of 1 percent, as base metals prices staged a broad-based rally after an early-week rout that pulled prices to multi-year lows.

But BHP Billiton underperformed its sector to fall 2.8 percent after JP Morgan downgraded the stock to underweight from neutral and said it was factoring a 50 percent reduction in its dividend due to a further downside risk to copper prices.

Auto stocks were also in demand, with the sector index adding 1.4 percent, helped by gains in Volkswagen (Other OTC: VLKAF - news) . Baader Bank Helvea confirmed its hold rating on the stock and said it remained cautious due to uncertainties on future costs related to the diesel engines emission scandal.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up RCH/EUROPE (Reporting by Danilo Masoni; Editing by Keith Weir)