* FTSEurofirst 300 up 0.4 percent
* Banks gain ahead of Morgan Stanley results, miners strong
* Novo Nordisk up on U.S. setback for rivals
* For up-to-the-minute market news, click on
By Harpreet Bhal
LONDON, Oct 20 (Reuters) - European shares rose by midday on Wednesday as miners rebounded on a weak dollar and banks rose ahead of results from U.S. peer Morgan Stanley, while Novo Nordisk gained after a setback for its rivals.
Shares were also supported by minutes from the Bank of England which reinforced expectations the central bank is edging towards further quantitative easing.
"We saw a bit of buying back into the market after the Bank of England minutes insinuated that the chances of more easing as opposed to more tightening have now taken a step onwards," said Joshua Raymond, market strategist at City Index.
By 1122 GMT the pan-European FTSEurofirst 300 index of top shares was up 0.4 percent at 1,086.77 points, after slipping 0.5 percent on Tuesday.
Novo Nordisk rose 8 percent to the top of the FTSEurofirst 300 index, rebounding from losses in previous session after U.S. health regulators declined to approve a diabetes drug being developed by peers Amylin Pharmaceuticals and Eli Lilly.
That boosted prospects for Novo's key new product hope Victoza.
Miners were also firmer, drawing strength from strong metals prices as the dollar retreated following gains on Tuesday after a surprise interest rate hike by China.
Eurasian Natural Resources, BHP Billiton and Xstrata added 1.8 to 2.2 percent.
Rio Tinto added 2 percent after it approved a $3.1 billion iron ore expansion, staking a claim to become the world's top producer and defying industry concerns over a new Australian mining tax.
Banks were also on the rise, with investors likely to focus on results from U.S. peers Morgan Stanley and Wells Fargo & Company to gauge the health of the banking sector.
"A lot of traders will be sitting on their hands ahead of the UK public spending review and also results from Morgan Stanley and Wells Fargo and we will get a bit more volatility once those two companies announce earnings," Raymond said.
Barclays, BNP Paribas and Deutsche Bank were up 1.3 to 1.5 percent.
Banks had earlier fallen on concerns lenders may be forced to take back mortgages after investors accused Bank of America of inappropriately bundling some mortgages into more than $47 billion of bonds on Tuesday.
"There are jitters after the Bank of America mortgage foreclosure worries," Will Hedden, sales trader at IG Index, said.
SPENDING REVIEW EYED
Moves on the equity market were limited ahead of the British government's spending review due at 1130 GMT.
Britain will take an axe to its welfare state on Wednesday as part of an 80 billion-pound ($125 billion) cut in public spending that will dictate the future of both the economy and the coalition government.
Ahead of the announcements, data showed British public borrowing hit a record high for a month of September.
UK defence firms were mixed as investors digest Tuesday's defence review, which tightened the screws on government spending in the sector. BAE Systems was down 3.4 percent, also hit after going ex-dividend.
Among other individual movers, Danish wind turbine maker Vestas Wind Systems fell 3.4 percent after two banks lowered their target prices for its stock and Belgian turbine gearbox maker Hansen Transmissions cuts its sales outlook.
Across Europe, the FTSE 100, Germany's DAX and France's CAC 40 were up 0.3 to 0.4 percent. (Additional reporting by Joanne Frearson; Editing by Michael Shields)