* 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: Quote, Profile, Research, Stock Buzz) fell on a UBS downgrade. By 0901 GMT, the FTSEurofirst 300 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 were in demand, rebounding from Thursday's weakness. HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) and UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) 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: Quote, Profile, Research, Stock Buzz) 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: Quote, Profile, Research, Stock Buzz), Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) 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 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: Quote, Profile, Research, Stock Buzz) 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: Quote, Profile, Research, Stock Buzz) put on 1.2 percent and Porsche (PSHG_p.DE: Quote, Profile, Research, Stock Buzz) 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: Quote, Profile, Research, Stock Buzz) 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: Quote, Profile, Research, Stock Buzz) climbed 2 percent after JPMorgan upgraded the telecoms operator to "overweight" from "neutral". UBS cut its rating on Enel (ENEI.MI: Quote, Profile, Research, Stock Buzz) to "neutral" from "buy". Enel shares were down 1.5 percent. (Additional reporting by Blaise Robinson; editing by John Stonestreet)

Source