* FTSEurofirst 300 index gain 1.4 percent
* Carmakers jump on General Motors debut
* Banks gain on recovery hopes, Ireland
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By Joanne Frearson
LONDON, Nov 18 (Reuters) - European shares rose on Thursday on expectations Ireland's troubled banking sector would receive help from the IMF and EU, while carmakers were boosted after General Motors surged in its return to the U.S. market.
The pan-European FTSEurofirst 300 index of top shares closed 1.4 percent higher at 1,108.12 points, adding to Wednesday's gains to turn the index positive for the week, after hefty falls on Tuesday.
"Ireland had been the cause of the sell-off this week and with the country keen to talk to the IMF/EU, this has calmed everyone's jitters," Mark Priest, senior equities trader at ETX Capital, said.
Investor nerves were soothed after Ireland's central bank Governor Patrick Honohan said he expected Dublin's struggling banking sector to receive tens of billions of euros in loans from European partners and the IMF.
"If everything is going to be stable and they are going to throw money at the problem, then there is no reason why these markets can't rally."
Also helping to ease concerns over euro zone sovereign debt was news that Spain had drawn solid demand for long-term bonds.
Banking stocks which are sensitive to changes in the economic environment were in demand on the recovery hopes.
Bank of Ireland rose 7.5 percent, while LLoyds Banking Group , KBC Bank and Royal Bank of Scotland, which all have exposure to Irish residential mortgage loans, gained 0.7 to 2.1 percent.
Mining stocks featured among the top performer, tracking higher metal prices which were also buoyed by the Irish news. Eurasian Natural Resources Corporation, Rio Tinto and Kazakhmys gained 2.4 to 3.2 percent.
The Thomson Reuters Peripheral Eurozone Countries Index rose 2.1 percent.
CARMAKERS JUMP
Elsewhere, carmakers were in demand as General Motors shares surged in their trading debut of its blockbuster initial public offering, the biggest in U.S. history.
Peugeot, Renault, Volkswagen and BMW were 2.8 to 3.7 percent higher.
Thomson Reuters StarMine one-year forward forecast earnings growth data for the STOXX Europe 600 Automobiles & Parts was high at 42.2 percent, compared with the overall STOXX Europe 600 index at 17.4 percent.
Looking at individual stocks, SABMiller gained 5.1 percent after forecast beating first-half earnings. "We see growth coming back, monetary policy staying loose for a longer period, and on top of that we're getting good earnings. You can add to that M&A activity which we think will be a major driver for stocks in the next couple of months," said Franz Wenzel, strategist at AXA Investment Managers, in Paris.
The markets also received a boost midafternoon after November factory activity in the U.S. Mid-Atlantic region grew more than expected and U.S. leading indicators for October signalled a pick-up in activity.
The technical picture looked positive. The Euro STOXX 50, the euro zone's blue-chip index, gained 1.9 percent to 2,855.23 points, moving back above a key Fibonacci level, the 38.2 percent retracement of the index's drop from a 2007 high to a 2009 low.
The index's next resistance level looms at around 2,900 points, the index's six-month high reached last week.
Across Europe, the FTSE 100 index was 1.3 percent higher, while Germany's DAX and France's CAC 40 both gained 2 percent. (Additional reporting by Blaise Robinson)