U.S. data pushes European shares to close higher

* FTSEurofirst 300 index up 0.4 pct

* Commodities track higher crude, metal prices

* Banks rebound; RBS slumps

By Joanne Frearson

LONDON, Nov 2 (Reuters) - European shares closed higher on Monday, boosted by better-than-expected U.S. manufacturing and pending home sales data, with commodities and banks the major gainers.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares closed up 0.4 to 980.28 points, having earlier been as low as 968.19 points.

The benchmark index is up more than 51 percent from its lifetime low of March 9, as investors have become more confident on the prospects for economic recovery.

"It has been an amazing turnaround. The ISM (U.S. Institute for Supply Management) was a very good strong figure," said Mike Lenhoff, strategist at Brewin Dolphin. "Economic numbers are surpassing expectations. Today is a jubilant reaction to the news flow which is very supportive."

Markets rebounded after data showed U.S. manufacturing sector grew in October for the third consecutive month and pending sales of previously owned U.S. homes unexpectedly rose in September. [ID:nN02309157] [ID:nN02432431]

Energy stocks gained as crude edged 1.4 percent higher. BG Group (BG.L), BP (BP.L) and Total (TOTF.PA) were up 1.3 to 2.2 percent.

Miners were among the top movers as gold rose above $1,050 an ounce and copper MCU3=LX and aluminium MAL3=LX were 0.8 percent higher.

Anglo American (AAL.L), Antofagasta (ANTO.L), BHP Billiton (BLT.L), Eurasian Natural Resources Corporation (ENRC.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) were up 2.9 to 5.5 percent.

BANKS RECOVER

Banking stocks recovered to feature among the best performers. HSBC (HSBA.L), BNP Paribas (BNPP.PA) and Banco Santander (SAN.MC) were up 0.8 to 3.3 percent.

However, Royal Bank of Scotland (RBS.L) slumped 7.8 percent after it said it will be forced to sell more assets than it had expected as another radical shake-up looms for Britain's banks. [ID:nL2281331]

"The extent of the disposals is greater than expected, which is not positive," said one analyst.

Lloyds Banking Group (LLOY.L) lost 2.3 percent after the Financial Times reported it would attempt to raise 7.5 billion pounds ($12.3 billion) in capital by offering existing bond holders the chance to exchange their bonds for riskier but higher yielding investments that could convert into equity. [ID:nL2303369]

Pharmaceutical shares were among top decliners, with Novartis (NOVN.VX) falling 0.2 percent on news that French drugmaker Sanofi-Aventis SA (SASY.PA) asked a U.S. federal court to block a Novartis unit from selling a generic version of its cancer drug in the United States because it infringes a patent.

Shire (SHP.L) fell 0.4 percent after Panmure cut its rating on the stock to "hold" from "buy", while AstraZeneca (AZN.L), Merck (MRCG.DE) and Roche Holding (ROG.VX) dropped 0.6 to 1.3 percent.

Across Europe, the FTSE 100 .FTSE index was up 1.2 percent, Germany's DAX .GDAXI was 0.3 percent higher and France's CAC 40 .FCHI was up 0.9 percent. (Editing by David Holmes)