* FTSEurofirst 300 index closes up 0.3 percent
* Sanofi-Aventis falls on fears over Lantus drug
* Banks gain; EU to release "stress tests" next month
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By Joanne Frearson
LONDON, June 18 (Reuters) - European shares rose on Friday for the eighth consecutive day, its longest winning streak in 11 months, boosted by banks as European leaders agreed to publish details of "stress tests" on the financial health of the sector.
However, a "quadruple witching" expiration of June stock futures and options and index futures and options increased trading volatility as traders squared their positions before the close.
Banks were in demand, with analysts suggesting the stress test to be published in July would boost investor trust in European banks. A senior euro zone source said the tests would simulate a slowdown in growth and stress on sovereign holdings.
Societe Generale <SOGN.PA>, Credit Agricole <CAGR.PA> and UBS <UBSN.VX> gained 1.7 to 6.1 percent.
The pan-European FTSEurofirst 300 <
> index of top shares closed up 0.3 percent at 1,044.52 points and was its highest close since May 13. The index rose around 2.5 percent for the week, its fourth consecutive week of gains.The index has added 6.6 percent in the past eight sessions but is still down 0.1 percent for 2010, having suffered in April and May when fears of a debt contagion in the euro zone gripped investors.
"A positive day, but there is still a lot of resistance on the top side," said Phil Roberts, technical analyst at Barclays Capital. "It has come a long way without a correction so next week the market may struggle."
"But in the bigger picture if it continues to consolidate above the 200-day moving average we could see further gains."
Meanwhile, Spanish bank Banco Santander <SAN.MC> rose 3.5 percent after it confirmed it had made an offer for hundreds of British branches of Royal Bank of Scotland <RBS.L>. RBS was up 0.6 percent.
CARMAKERS GAIN
Carmakers were in demand, with Porsche <PSHG_p.DE> up 1.3 percent. The company said falling debt and steady sportscar sales will lead to a narrower loss in fiscal 2010.
German luxury carmakers BMW <BMWG.DE> and Daimler <DAIGn.DE> rose 2.5 and 1.9 percent respectively, after Credit Suisse raised its price targets for both companies.
On the downside, drugmakers featured among the worst performers. Sanofi-Aventis <SASY.PA> fell 3 percent after analysts and traders cited talk of cancer risks relating to its Lantus diabetes drug. [
]Meanwhile BP <BP.L> retreated from earlier gains and fell 0.6 percent after Moody's cut its credit rating by three notches on Friday, the oil major's third downgrade in a week.
Across Europe, the FTSE 100 <
> index fell 0.1 percent, Germany's DAX < > was down 0.1 percent and France's CAC 40 < > rose 0.1 percent.The Thomson Reuters Peripheral Eurozone Countries Index <.TRXFLDPIPU> gained 1.4 percent. (Editing by Sharon Lindores)