Banks, autos boost European shares; Renault rises

* FTSEurofirst 300 gains 1 pct after Tuesday sell-off

* Automakers among top gainers; Renault rises 4.8 pct

* Banks gain; investors await Fed's rate decision

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, Nov 4 (Reuters) - European shares bounced back on Wednesday after sharp losses in the previous session, with banks gaining ground ahead of the U.S. Federal Reserve's rate decision and with Renault (RENA.PA) leading automobile stocks higher.

At 0920 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 1 percent at 978.66 points after falling 1.2 percent to a one-month closing low on Tuesday.

The index, which is up 17.6 percent so far in 2009, has gained 51 percent since hitting a record low in early March.

Auto shares were in demand, with European carmakers .SXAP rising 2.8 percent to feature among the biggest gainers, bouncing back from a 14-percent selloff over the past two weeks, after Nissan Motor (7201.T) revised its annual forecast. [ID:nSP536647]

Renault (RENA.PA), which has a significant stake in Nissan, rose 4.8 percent, while Daimler (DAIGn.DE), Peugeot (PEUP.PA) and Fiat (FIA.MI) added 2.4 to 3.7 percent.

In other industry news, after months of negotiations, General Motors has abandoned the sale of Opel to a group led by Canada's Magna (MGa.TO), saying improving business conditions and the strategic importance of Opel had prompted the decision by its board. [ID:nL4679629]

"The macro data flow has been very positive over the last couple of days and I think the markets can go a bit higher from here," said Klaus Wiener, research head at Generali Investments.

"In the end, the markets will take their lead from macro-economic data flow and earnings. The aggressive cost cuttings that we have seen, especially in the U.S. and a big drop in unit labour cost are good for profit margins."

Data showed on Tuesday that new orders received by U.S. factories beat expectations to rise 0.9 percent in September, while Redbook Research said U.S. chain store sales rose 0.9 percent last week. [ID:nNYS007494] [ID:nN02454734]

Banks gained, after steep losses on Tuesday following disappointing results from UBS (UBSN.VX) and sharp declines in Royal Bank of Scotland (RBS.L) shares. The DJ STOXX European banking index .SX7P gained 2.2 percent and is up 155 percent since a floor in March.

Societe Generale (SOGN.PA) advanced 5.5 percent. It doubled its third-quarter net profit from a year ago, but said the economic environment remained uncertain. [ID:nL3620732]