* FTSEurofirst 300 rises 0.8 pct
* Banks rise on Portugal bond auction hopes
* For up-to-the-minute market news, click on [STXNEWS/EU]
By Brian Gorman
LONDON, Jan 12 (Reuters) - European shares rose to their highest in 28 months on Wednesday, with banks gaining, on expectations that a Portuguese bond auction will go well and help ease the country's debt crisis.
But most investors still believe the country will follow Greece and Ireland in requiring a bailout.
At 0912 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.8 percent at 1,156.82 points, and had hit 1,158.66, the highest since September 2008.
Portugal is set to tap investors for between 750 million euros ($972.1 million) and 1.25 billion euros and is seen paying record high premiums to place its debt, though bond buying by the European Central Bank should prevent yields from making a dramatic move higher. [ID:nLDE70A20B]
"I don't have any problems believing the auction is going to go well, particularly as the EU as well as the Financial Stability Fund have indicated their support," said Heino Ruland, strategist at Ruland Research, in Frankfurt, "and it is tiny."
"Spanish banks, exposed to Portugal, are rising and so are French banks, exposed to Spain."
Heavyweight banks to gain included Banco Santander
Company earnings are beating expectations, analysts say, which is helping to buoy markets.
"The results season has started well. In Europe, we're still in the first year of earnings starting to turn up," said Philip Isherwood, European equities strategist at Evolution Securities.
Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX <.GDAXI> and France's CAC40 <.FCHI> rose between 0.5 and 1.2 percent.
Portugal's PSI20 <.PSI20> rose 0.8 percent; Spain's IBEX 35 <.IBEX> rose 2.6 percent.
Miners gained, helped by higher metals prices as the euro rose against the dollar.
Anglo American