* FTSEurofirst 300 gains 0.2 percent, volume low
* Construction shares top gainers, Skanska rises 3.1 percent
By Atul Prakash
LONDON, Dec 29 (Reuters) - European equities nudged higher in holiday-thinned trade on Wednesday, with heavyweight Skanska pushing construction shares to the top of the gainers' list after saying it was selling its stake in a Chilean highway concession.
The STOXX Europe 600 Construction & Materials index rose 0.8 percent, while Skanska, Balfour Beatty and Saint-Gobain rose 0.9 to 3.1 percent.
At 1230 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,142.07 points after rising 0.3 percent on Tuesday. Volume was just 18 percent of its 90-day daily average with many traders still on holiday.
The index has gained 7 percent in December and is on course for its biggest monthly rise since March. The benchmark, which is up more than 76 percent from its lifetime low of March 2009, is up 9.2 percent in 2010 after rising 26 percent in 2009.
Analysts said the market was expected to hover in narrow trading ranges in the remaining days of the year as investors were avoiding strong bets.
"The first few days of the new year will be good as a lot of new money will flow into the market, but people will become cautious again," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
"You will have question marks on how the U.S. economy is going to react in 2011 to the stimulus package. There will also be questions about the debt situation in Europe and growth in emerging markets."
Across Europe, Germany's DAX rose 0.4 percent and France's CAC40 gained 0.9 percent, but Britain's FTSE 100 fell 0.5 percent.
London shares were trading for the first time since Christmas and to some extent were catching up with the decline on mainland Europe earlier in the week, partly due to China's move to raise interest rates on Christmas Day.
Short-term market sentiment remained positive.
"At the moment the market doesn't want to know the bad news, and it's very reluctant to give up any ground whatsoever," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities, in London.
Skanska gained 3.1 percent after the Nordic region's biggest construction group said it was selling its 50 percent stake in the six-lane Autopista Central highway concession to Alberta Investment Management Corporation.
In macroeconomic news, the long-running year-on-year decline in lending to euro zone firms nearly ground to a halt in November, bolstering hopes of a rise in credit that will foster economic recovery in the region.
Among individual movers, Rio Tinto fell 1.6 percent after declaring force majeure on some coal sales contracts due to heavy rains at collieries in Australia's Queensland state.
(Additional reporting by Brian Gorman; editing by David Hulmes)