Banks, autos boost European shares; Renault rises

                                
 * FTSEurofirst 300 gains 1 pct after Tuesday sell-off
                                
 * Automakers among top gainers; Renault rises 4.8 pct
                                
 * Banks gain; investors await Fed's rate decision 
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]
                                
 By Atul Prakash
                                
 LONDON, Nov 4 (Reuters) - European shares bounced back on
Wednesday after sharp losses in the previous session, with banks
gaining ground ahead of the U.S. Federal Reserve's rate decision
and with Renault <RENA.PA> leading automobile stocks higher.
                                
 At 0920 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was up 1 percent at 978.66 points after falling
1.2 percent to a one-month closing low on Tuesday.
                                
 The index, which is up 17.6 percent so far in 2009, has
gained 51 percent since hitting a record low in early March.
                                
 Auto shares were in demand, with European carmakers <.SXAP>
rising 2.8 percent to feature among the biggest gainers,
bouncing back from a 14-percent selloff over the past two weeks,
after Nissan Motor <7201.T> revised its annual forecast.
[ID:nSP536647]
                                
 Renault <RENA.PA>, which has a significant stake in Nissan,
rose 4.8 percent, while Daimler <DAIGn.DE>, Peugeot <PEUP.PA>
and Fiat <FIA.MI> added 2.4 to 3.7 percent.
                                
 In other industry news, after months of negotiations,
General Motors has abandoned the sale of Opel to a group led by
Canada's Magna <MGa.TO>, saying improving business conditions
and the strategic importance of Opel had prompted the decision
by its board. [ID:nL4679629]
                                
 "The macro data flow has been very positive over the last
couple of days and I think the markets can go a bit higher from
here," said Klaus Wiener, research head at Generali Investments.
                                
 "In the end, the markets will take their lead from
macro-economic data flow and earnings. The aggressive cost
cuttings that we have seen, especially in the U.S. and a big
drop in unit labour cost are good for profit margins."
                                
 Data showed on Tuesday that new orders received by U.S.
factories beat expectations to rise 0.9 percent in September,
while Redbook Research said U.S. chain store sales rose 0.9
percent last week. [ID:nNYS007494] [ID:nN02454734]
                                
 Banks gained, after steep losses on Tuesday following
disappointing results from UBS <UBSN.VX> and sharp declines in
Royal Bank of Scotland <RBS.L> shares. The DJ STOXX European
banking index <.SX7P> gained 2.2 percent and is up 155 percent
since a floor in March.
                                
 Societe Generale <SOGN.PA> advanced 5.5 percent. It doubled
its third-quarter net profit from a year ago, but said the
economic environment remained uncertain. [ID:nL3620732]
                                
 UBS was up 3.1 percent, while Royal Bank of Scotland rose
3.4 percent. Standard Chartered <STAN.L>, HSBC <HSBA.L>,
Barclays <BARC.L>, Lloyds <LLOY.L>, BNP Paribas <BNPP.PA>,
Allied Irish Banks <ALBK.I> and Bank of Ireland <BKIR.I> gained
between 0.9 percent and 11.7 percent.
                                
 Across Europe, Britain's FTSE 100 index <.FTSE>, Germany's
DAX <.GDAXI> and France's CAC 40 <.FCHI> rose 0.8-1.3 percent.
                                
 
                                
 MINERS UP, RISK APPETITE GROWS
                                
 Miners got strength from higher base metals prices, which
gained on expectations of a dollar sell-off after the Fed
meeting. A fall in the dollar makes commodities cheaper for
holders of other currencies and often boosts their demand. 
                                
 The Fed is expected to reaffirm at the end of its two-day
meeting on Wednesday that policies to support the economy will
stay in place for some time, even as signs of recovery mount.
                                
 BHP Billiton <BLT.L>, Anglo American <AAL.L>, Antofagasta
<ANTO.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L> and Eurasian
Natural Resources <ENRC.L> rose 1.2 to 3.3 percent.
                                
 Retailers were also in demand. Marks & Spencer <MKS.L>
advanced 5.6 percent after reporting flat first-half profits,
towards the top end of expectations as tight management of costs
and stock offset weak sales.
                                
 Britain's Next <NXT.L> was up 5.3 percent. It recorded
better than expected third-quarter sales and upgraded its sales
and profit guidance for the balance of the year. [ID:nL3585427]
                                
 Investors' appetite for risky assets grew, with the VDAX-NEW
volatility index <.V1XI> falling 4 percent after hitting a
six-week high on Tuesday. The lower the index, which is based on
sell and buy options on Frankfurt's top-30 stocks <0#.GDAXI>,
the higher is the desire for risk.
                                
 Pharmaceutical stocks, generally seen as defensive plays,
were broadly lower. AstraZeneca <AZN.L>, GlaxoSmithKline
<GSK.L>, Novartis <NOVN.VX>, Roche Holding <ROG.VX> and 
Sanofi-Aventis <SASY.PA> fell 0.4 to 1.5 percent.
 (Editing by Hans Peters)