* FTSEurofirst 300 index gains 0.2 percent
* Standard Chartered dips on BofA Merrill Lynch downgrade
* China inflation data eyed on weekend
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, Dec 10 (Reuters) - European shares rose for the
fifth session on Friday, with carmakers up as BMW <BMWG.DE>
gained on a positive broker note, while banks slipped after
Standard Chartered was hit by a BofA Merrill Lynch downgrade.
However, gains were limited as investors remained cautious
ahead of Saturday's Chinese November CPI figures, with analysts
concerned a high reading could prompt the central bank to raise
interest rates.
November Chinese import and export data came in stronger
than expected adding to worries of further interest rate rises,
while China's central bank on Friday announced it was raising
lenders' required reserves by 50 basis points for the sixth time
this year.
By 0959 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was 0.2 percent higher at 1,125.82 points
after reaching its highest close since late September 2008 on
Thursday.
"I don't expect the rises to last. Just because we have seen
a lull in the euro zone debt crisis does not mean it is all over.
I would be wary about the recent rises," Jeremy Batstone-Carr,
head of equities at Charles Stanley said.
"We get Chinese inflation data tomorrow which is important
for the market and I think we will see some rate hikes from
China over 2011. It could take some of the heat out ... but
overall I think China will avoid a hard landing."
Stronger-than-expected November Chinese import and export
data has also led some analysts to believe the central bank
could tighten monetary policy as soon as this weekend.
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Commodity stocks reversed earlier session gains as investors
worried about the possibility of slowing growth in China.
Antofagasta <ANTO.L>, Rio Tinto <RIO.L> and Lonmin <LMI.L>
slipped 0.4 to 0.5 percent, but Anglo American <AAL.L> was 1.4
percent higher after it announced will start building one of its
biggest growth projects in Brazil early next year.
However, the index got some support from carmakers,
recovering from the previous session's sharp losses when shares
were knocked after traders on Thursday cited a report China may
end tax breaks for passenger cars.
BMW <BMWG.DE> gained 3.1 percent after Natixis raised its
price target, while Porsche <PSHG_p.DE>, Daimler <DAIGn.DE> and
Continental <CONG.DE> gained 1.6 to 3.4 percent.
BANKS SLIP
Banking stocks featured among the worst performers, with the
STOXX Europe 600 Banks <.SX7P> down 0.8 percent. Standard
Chartered <STAN.L> fell 2 percent after BofA Merrill Lynch
downgraded the Asia-focused bank to "neutral" from "buy".
Looking at individual stocks, Rolls Royce <RR.L> fell 0.6
percent after traders cited a story in the Financial Times which
said the engineer could face costs of $500 million after the
explosion of one of its engines on a Qantas Airbus A380 flight
in November.
Later in the session investors will focus on the University
of Michigan prelimary December consumer sentiment. Economists in
a Reuters survey expect a reading of 72.5 compared with 71.6 in
the final November report.
"It depends on the U.S. Michigan Consumer sentiment whether
the market stays up. If it is higher then the rally will be
extended as it clear evidence the jobs market could be turning,"
Heino Ruland, strategist at Ruland Research in Frankfurt, said.
Across Europe, the FTSE 100 <> index was down 0.1
percent, Germany's DAX <> was 0.6 percent higher and
France's CAC 40 <> was up 0.2 percent.
(Reporting by Joanne Frearson; Editing by Jon Loades-Carter)
