* Banks rise, aided by gains in U.S. financials
* Oils gain despite weaker crude prices
* Porsche gains on Qatar bid report
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By Dominic Lau
LONDON, July 13 (Reuters) - European shares rallied on Monday, recouping some of last week's steep losses, as banks tracked advances in U.S. financials while oil stocks were also in demand despite weak crude prices.
The FTSEurofirst 300 index of top European shares closed up 2 percent at 830.19 points, after touching 805.93 earlier in the session -- its lowest since late April.
Volumes on the FTSEurofirst 300 were about 70 percent of the 90-day daily average.
Banks were among the top gainers, aided by advances in U.S. financials after influential analyst Meredith Whitney, who recently founded her own advisory firm, upgraded Goldman Sachs to "buy" from "neutral" and provided a reassuring assessment of the sector's performance.
BNP Paribas, Banco Santander, Credit Suisse, Royal Bank of Scotland, Barclays, Commerzbank and Deutsche Bank put on between 1.5 percent and 4.3 percent.
In the same sector UBS was a standout performer with a 4.8 percent rise. A U.S. judge agreed to delay the start of a trial in which U.S. tax authorities hoped to force the Swiss bank to reveal the identities of thousands of wealthy Americans suspected of using the bank to dodge taxes.
The postponement was requested in a joint motion from UBS and the U.S. Justice Department, raising hopes of a settlement in the case.
Elsewhere some said shares looked better value after recent declines.
"The market has come back a lot. There is a suspicion that this quarter could prove to be slightly better. Earnings estimates have been revised down quite a bit," said Mike Lenhoff, chief strategist at London-based Brewin Dolphin.
"There is also a feeling that the U.S. economy reached the trough of the recession in last quarter for which the earnings are being reported now, and there is even a modest but positive growth in the third quarter."
Oil producers rode on the coattail of financials and shrugged off weaker crude prices. BP, Royal Dutch Shell, Total, Repsol and BG Group were up between 1.3 and 2.2 percent.
Across Europe, Britain's FTSE 100 rose 1.8 percent, Germany's DAX rallied 3.2 percent and France's CAC 40 surged 2.3 percent.
The pan-European index lost 3.4 percent last week to notch up a fourth straight week of losses on worries about corporate earnings and the pace of economy recovery. But the benchmark is still up 28.6 percent from the record low it hit on March 9.
Credit Suisse Asset Management said it expected a 20 percent short-term rise ahead for European stocks, prompting a temporary "overnight" stance, but said investors should begin to selectively sell once such gains were made.
AUTOS, INSURERS RACE HIGHER
Automakers also raced higher. Porsche surged 9.7 percent after a report said the ruler of the Gulf state of Qatar is willing to offer 7 billion euros for both a stake of just over 25 percent in the listed holding company and Porsche's cash-settled options in Volkswagen stock.
Both Porsche and Volkswagen, whose shares added 4.9 percent, declined to comment.
Within the sector, Daimler and BMW advanced 6 percent and 3.3 percent, respectively.
Dutch conglomerate Philips Electronics surged 7.3 percent after it signalled brighter prospects for the second half of 2009, helped by cost cuts, as it surprised the market with a return to profit in the second quarter.
UK life insurer Friends Provident jumped 12.6 percent as it rejected a takeover proposal from Resolution, saying the terms were inadequate.
The news boosted the sector, with Aviva, Legal & General, Prudential and Standard Life up 2.3 percent to 8.7 percent.
Shares in K+S were among the biggest fallers on the pan-European index, down 3 percent after lower Indian potash prices prompted UBS to downgrade its rating on the fertilizer group to "sell" from "neutral". (Additional reporting by Atul Prakash, Blaise Robinson and Tyler Sitte; Editing by David Holmes)