* European bank shares rise after Santander rescues rival Popular
* All eyes on "Triple Threat Thursday"
* Oil plunges after supply data
* Euro hit by report ECB may cut inflation outlook (Changes dateline to New York; adds Wall Street open; updates throughout)
By Hilary Russ
NEW YORK, June 7 (Reuters) - A smoothly executed rescue of Spain's struggling Banco Popular lifted European bank stocks on Wednesday, while U.S. stock and bond investors showed caution ahead of Thursday's British vote, an ECB meeting and testimony by ex-FBI chief James Comey.
Oil prices dipped on renewed concerns about the efficacy of OPEC-led production cuts and a Mideast political rift, then extended losses after EIA data showed a surprise build in U.S. crude inventories. crude CLcv1 fell 4.21 percent to $46.16 per barrel and Brent LCOcv1 was last at $48.37, down 3.49 percent on the day.
In Spain, the absorption of Popular by the country's biggest bank Santander SAN.MC for a nominal 1 euro was the first use of a regime to deal with failing banks adopted after the 2008 financial crisis, and made barely a ripple in Europe's stock and debt markets. success of the process pushed shares in many major banks higher, supporting a recovery for Madrid's stock market .IBEX and fending off this week's broadly weaker mood.
European banking shares .SX7E rose 1.38 percent.
"The market has taken Banco Popular as positive news because essentially this is not a bankruptcy but a sort of rescue, even if its subordinated bondholders have been sharply hit," said Giuseppe Sersale, a fund manager at Anthilia Capital in Milan.
The bank rescue does, however, underline the risks to growth, banking and government debt burdens that are likely to delay a major switch in language and policy direction by the European Central Bank at its meeting on Thursday.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.13 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.04 percent.
The euro EUR= turned shaky after reports suggested the ECB would lower its inflation targets. It was last down 0.23 percent to $1.125. tomorrow's ECB meeting sees nothing but platitudes and disappoints a market that is getting ahead of itself," said Societe Generale (PA:SOGN) analyst Kit Juckes.
"But (for us) that would be a huge euro buying opportunity, because ECB normalisation is coming. And when it does, the euro simply won't be able to sustain undervalued levels for long."
The ECB meeting is one of three events that ING currency strategist Viraj Patel said had been dubbed 'Triple Threat Thursday,'... an event-filled day that could send global markets on a bumpy ride."
Also on Thursday will be a surprisingly closely-fought British election and U.S. Senate testimony from James Comey, the former FBI chief fired by President Donald Trump.
Any damaging revelations in Comey's testimony are likely to further hurt Trump and take the wind out of his plans to roll back regulations and overhaul the tax system - an agenda that had sent the dollar to 14-year highs earlier this year.
On Wall Street, shares opened slightly higher, turned negative and then rose again. Dow Jones Industrial Average .DJI rose 18.41 points, or 0.09 percent, to 21,154.64, the S&P 500 .SPX gained 2.44 points, or 0.10 percent, to 2,431.77 and the Nasdaq Composite .IXIC added 21.12 points, or 0.34 percent, to 6,296.17. the calm before the storm. We have a quiet week in terms of economic data and there's a general global unease at the moment," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"The impact of Comey's statement really depends on what he says, and anyway these hearings are long and dragged out. The UK elections could have an impact if there is a hung parliament and the various polls are adding a level of uncertainty."
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http://reut.rs/2mcp7T1 Emerging markets in 2017
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