Commodities lift European shares; Fiat, SEB slip

LONDON Nov 20 (Reuters) - European shares on Friday rebounded from the previous session's sharp falls and snapped a three-day losing run, aided by gains in commodity stocks on firmer raw material prices but Fiat fell on a UBS downgrade.

By 0818 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.4 percent at 1,014.76 points, after losing 1.6 percent on Thursday.

Miners were in favour after metal prices rebounded. BHP Billiton (BLT.L), Anglo American (AAL.L), Xstrata (XTA.L) and Vedanta Resources (VED.L) were up 0.7-1.1 percent.

Oil producers advanced, with BP (BP.L), Total (TOTF.PA) and Royal Dutch Shell (RDSa.AS) up 0.3-0.7 percent.

Fiat (FIA.MI), however, topped the fallers in the pan-European index, down 1.8 percent after UBS downgraded the carmaker to "neutral" from "buy".

"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 a end-of-year rally."

Banks .SX7P were also firmer, but Sweden's SEB (SEBa.ST) lost 1.3 percent after Morgan Stanley cut its rating to "underweight" from "overweight".

The pan-European index has rallied 57 percent since hitting a trough in early March, and is up 22 percent for the year. (Reporting by Dominic Lau and Blaise Robinson)