* FTSEurofirst 300 up 0.6 percent; volumes low
* Miners up on hopes Australia tax plan will not materialise
* Old Mutual gains as HSBC plans to buy Nedbank stake
* For up-to-the-minute market news, click on
By Harpreet Bhal
LONDON, Aug 23 (Reuters) - European shares rose on Monday, with miners up on hopes that election results in Australia would end plans for a new mining tax, while Old Mutual gained after HSBC said it wanted a stake in Nedbank.
By 0900 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.6 percent at 1,035.64 points, rebounding after falling to a one-month closing low on Friday.
However, trading volumes were low as the summer holiday period gets into full swing, at just 10 percent of the average 90-day trading volume in early business.
Mining shares were boosted by hopes that Australian Prime Minister Julia Gillard would fail to form a government, spelling the end of her plan for a 30 percent tax on major iron ore and coal mines.
BHP Billiton, Rio Tinto and Xstrata were up 1.5 to 1.7 percent.
In the latest merger and acquisition (M&A) move, HSBC said it was in talks to buy up to 70 percent of South Africa's Nedbank, in which Old Mutual has a controlling stake, in a potential $6.8 billion deal..
Old Mutual gained 4.3 percent. Within the sector, Prudential and Aviva both added around 2.3 percent.
"The whole market is geared to M&A activity," said David Buik, senior partner at BCG Partners.
"We're of the opinion that the quality of economic data across the world is poor, but on the other side of the coin there is enough M&A activity out there to limit any kind of a fall in the immediate future."
M&A talk also dominated the beverage sector. SABMiller shed 0.7 percent after sources said the beverage firm and peer Asahi Breweries are looking at Foster's Group's beer operations, which are valued at more than $10 billion.
Global mergers and acquisitions have hit nearly $200 billion so far in August, Thomson Reuters data showed, and included BHP Billiton's $39 billion hostile offer for Potash Corp of Saskatchewan, and RSA Insurance's 5 billion pound offer to buy rival Aviva's non-life units, which Aviva has rejected.
Across Europe, Britain's FTSE 100 was up 0.6 percent, Germany's DAX rose 0.4 percent and France's CAC-40 added 0.7 percent.
MODERATE RECOVERY
On the macroeconomic front, euro zone PMI data showed the bloc's economic recovery moderated slightly this month, but companies were more optimistic about coming months despite an ongoing divergence in growth rates between member countries.
The European benchmark stock index soared 62 percent between its lifetime low in March 2009 and the end of the year. But the rally has stalled, and the FTSEurofirst 300 is down 1.1 percent in 2010 on worries about austerity measures in Europe and the strength of the economic recovery.
Some analysts expect economic data in coming weeks to show a slowing recovery in both Europe and the United States, which is expected to weigh on stocks in the medium term.
"Macroeconomic figures are still likely to come in worse than expected and could push down the market. On the other hand we have some relief from M&A activities but that is not going to be able to offset the bad economic numbers," said Koen de Leus, economist at KBC Securities.
Among other gainers, Wolseley gained 2.9 percent as broker Numis upgraded its rating on the world's largest builders merchant distributor to "buy" from "add" on valuation grounds. (Editing by Michael Shields)