• French stocks rise, banks lead gains
• Safran down after new financial targets
• Arubis up on better-than-expected dividend proposal

Dec 5 (Reuters) - European stocks hovered near one-month highs on Thursday as investors shrugged off concerns about political instability in France after lawmakers voted to topple Prime Minister Michel Barnier's government in a widely expected move.

The pan-European STOXX 600 (.STOXX) , opens new tab rose 0.2% by 0945 GMT, extending gains for a sixth consecutive session. France's CAC 40 (.FCHI) , opens new tab climbed 0.3%, having touched a three-week high at one point.

Barnier is expected to resign on Thursday, making him the shortest serving prime minister in modern French history. France now risks ending the year without a stable government or a 2025 budget, although the constitution allows special measures that would avert a U.S.-style government shutdown.

"The reaction you're seeing is ultimately equity markets shrugging off this vote because in many ways it had been widely expected, so it hasn't really come as a shock," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

The risk premium investors demand to hold French debt rather than German Bunds dropped from its highest levels in over 12 years as market participants had been expecting a muted reaction or even a "buy on rumours, sell on news" response to the fall of the government.

President Macron, who is expected to deliver a televised address to the country at 1900 GMT, is expected to name a premier before a ceremony to reopen the Notre-Dame Cathedral on Saturday.

Major French lenders rose, with BNP Paribas (BNPP.PA) , opens new tab, Societe Generale (SOGN.PA) , opens new tab and Credit Agricole (CAGR.PA) , opens new tab up between 1.7%% and 2.8%.

German copper producer Aurubis (NAFG.DE) , opens new tab jumped 14% after a better-than-expected dividend proposal.

Shell (SHEL.L) , opens new tab fell 1% after the British oil major and Norway's Equinor (EQNR.OL) , opens new tab said they would merge their British offshore oil and gas assets into an equal joint venture.

Safran (SAF.PA) , opens new tab fell 4.9% after the French jet engine maker issued new financial targets.

French oil firm TotalEnergies (TTEF.PA) , opens new tab rose 1% after RBC upgraded its shares to "outperform" from "sector perform".

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https://www.reuters.com/markets/europe/european-stocks-edge-higher-investors-weigh-impact-french-govt-collapse-2024-12-05/