* FTSEurofirst 300 up 0.7 percent; hits 27-month high
* Miners, chemical shares feature among top gainers
* Trading volumes remain low as year end approaches
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By Atul Prakash
LONDON, Dec 21 (Reuters) - European shares hit a 27-month high in holiday-thinned trade on Tuesday, with record high copper prices on supply concerns helping mining stocks. The stock market was also supported by China saying it backed steps taken by European authorities to tackle the region's debt problems. North Korea's promise to a U.S. envoy to allow in U.N. inspectors also helped.
Appetite for risky assets grew, with the VDAX-NEW volatility index falling 2.6 percent to trade near last week's 32-month low. The lower the index, the higher the market's desire to buy riskier assets such as equities.
At 0902 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,141.12 points after rising up to 1,142.08 -- the highest since September 2008. It is up 9 percent this year after surging 26 percent in 2009.
Miners were among the top gainers, with the STOXX Europe 600 basic resources index up 2 percent. BHP Billiton rose 1.9 percent, while Rio Tinto gained 2.2 percent.
"Tensions in Korea seem to have eased a little bit and that may be adding to sentiment. On balance, we had reasonably good economic figures from the United States and corporate earnings generally have been above expectations," said Keith Bowman, equity analyst at Hargreaves Lansdown.
"But there is not a great deal of direction in the market due to relatively lower volumes."
Volumes on the FTSEurofirst 300 were 11.5 percent of the three-month daily average.
STOCKS CHEAPER
European stocks continued to trade at relatively cheap levels, with the average price-to-earnings ratio for the STOXX 600 at 10.9, below the 10-year average of 13.8, according to Thomson Reuters Datastream.
The technical picture also improved. The Euro STOXX 50, the euro zone's blue-chip index, hovered above its 50-day moving average and a 38.2 percent Fibonacci retracement of a major fall to a trough in 2009 from a high in 2007.
"The most important reason for the move, however, is seasonality," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, in Brussels.
"This is the traditionally best season of the year. On top of this, active money managers have had one of the worst years in history. So, they try to play catch-up and buy every dip. We expect markets to remain well supported into the New Year."
Chemical shares gained, with the sector index rising 1.1 percent. DSM and Akzo Nobel gained 4 percent and 2.2 percent respectively as KBC raised its price target for DSM and upgraded Akzo to "buy" from "accumulate".
DSM said it was buying Martek Biosciences Corp for $1.09 billion to specialise further in the niche food nutrition industry.
Moody's Investors Service said it may cut debt-laden Portugal's A1 rating by one or two notches after a review that will take no more than three months.
Among individual shares, UPM-Kymmene climbed 6 percent. The forestry group is to buy debt-laden Finnish paper maker Myllykoski and partner Rhein Papier in a 900 million euro deal, bringing much needed consolidation to Europe's paper industry. (Editing by Dan Lalor)