European shares rebound, snapping 3-day losing run

                                
 * Banks, oils firm; Fiat tops FTSEurofirst 300 fallers
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Dominic Lau
                                
 LONDON, Nov 20 (Reuters) - European shares rebounded on
Friday from the previous session's sharp falls and snapped a
three-day losing run, lifted by banks and oil producers but Fiat
<FIA.MI> fell on a UBS downgrade.
                                
 By 0901 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was up 0.4 percent at 1,014.88 points after
losing 1.6 percent on Thursday to hit a one-week closing low.
                                
 "We're still stuck in a tight range, and this could last
until December," said David Thebault, head of quantitative sales
trading at Global Equities in Paris.
                                
 "Recent U.S. housing data and default rates are grim and
that could seriously revive fears over banks' balance sheets and
dampen hopes of an end-of-year rally."
                                
 Banks <.SX7P> were in demand, rebounding from Thursday's
weakness. HSBC <HSBA.L>, BNP Paribas <BNPP.PA>, Royal Bank of
Scotland <RBS.L>, Societe Generale <SOGN.PA> and UBS <UBSN.VX>
were up 0.2-1.2 percent.
                                
 However Credit Suisse said in a note that it had a "small
underweight" of continental European banks, citing their
sensitivity to falls in credit spreads, though leeway for
further spread declines is limited.
                                
 Sweden's SEB <SEBa.ST> lost 1.4 percent after Morgan Stanley
cut its rating to "underweight" from "overweight".
                                
 Oil producers advanced, with crude prices <CLc1> ticking
higher. BP <BP.L>, Total <TOTF.PA> and Royal Dutch Shell
<RDSa.L> put on 0.5-0.6 percent.
                                
 The pan-European benchmark has lost 0.4 percent so far this
week. The index has rallied 57 percent since hitting a trough in
early March and is up 22 percent for the year.
                                
 Across Europe on Friday, Britain's FTSE 100 <.FTSE>,
Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> were all up
0.6 percent.
                                
 The VDAX-NEW volatility index <.V1XI> eased 3.8 percent. The
lower the index, the higher the market's appetite for risky
assets like equities.
                                
 
                                
 FIAT DOWN, VOLKSWAGEN UP
                                
 Fiat <FIA.MI> topped the fallers in the pan-European index,
down 2.6 percent after UBS downgraded the carmaker to "neutral"
from "buy".
                                
 Also in the auto sector, Volkswagen <VOWG.DE> put on 1.2
percent and Porsche <PSHG_p.DE> added 0.2 percent after
Volkswagen and its supervisory board approved final details of a
49.9 percent stake in the sports car maker and an eventual
tie-up with Porsche's parent company.
                                
 Capgemini <CAPP.PA> added 1 percent after its chief
executive Paul Hermelin said late on Thursday that the IT
services company could use its strong cash position to make
acquisitions or pay an extra dividend.
                                
 Also on the upside, Cable & Wireless <CW.L> climbed 2
percent after JPMorgan upgraded the telecoms operator to
"overweight" from "neutral".
                                
 UBS cut its rating on Enel <ENEI.MI> to "neutral" from
"buy". Enel shares were down 1.5 percent.
                                
(Additional reporting by Blaise Robinson; editing by John
Stonestreet)