* FTSEurofirst 300 up 0.2 percent; highest since late April
* Miners among top gainers as weaker dollar boosts metals
By Brian Gorman
LONDON, Oct 14 (Reuters) - European shares hit their highest in more than five months on Thursday, boosted by hopes of more monetary easing in the United States, a robust earnings season, and with miners higher on stronger metals prices.
However, a weaker banking sector capped gains for key indexes.
By 1044 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,088.11 points after touching 1,094.13 points, the highest since late April.
"The earnings season has been good, and guidance from corporates is for recovery of profits. We're trading at 25-year low PE ratios," said Dean Tenerelli, fund manager at T Rowe Price.
"Stocks, relative to bonds, are extremely cheap. There is a lot of valuation space for the market to continue to go higher," Tenerelli said, adding industrial stocks would continue to do well.
He also said the market was supported by expectations of more quantitative easing by the U.S. Federal Reserve.
Telecoms were among the major gainers.
Vodafone rose 1.7 percent following an upgrade from Nomura, which cited strong costs reduction. Telefonica and Telecom Italia rose 1.1 and 2.1 percent respectively.
Miners also featured among the risers, tracking gains in metals prices.
Gold hit a record high, silver climbed to a 30-year peak and copper rose to its highest level in 27 months on a steep fall in the dollar, making commodities cheaper for holders of other currencies.
Fresnillo, Rio Tinto and Xstrata rose between 0.7 and 2.4 percent.
Appetite for risky assets such as equities jumped, with the VDAX-NEW volatility index falling 8 percent and hitting its lowest in almost three years. The lower the index, which is based on sell and buy options on Frankfurt's top-30 stocks, the higher the market's desire to take risk.
"Stock indexes are breaking out of their six-month range, and this has triggered a sharp rise in risk appetite," said David Thebault, head of quantitative sales trading at Global Equities in Paris.
Across Europe, the FTSE 100 was down 0.4 percent having hit its highest in more than five months earlier; Germany's DAX rose 0.5 percent, having hit a two-year high and France's CAC 40 was flat.
BANKS FALL
However, the banking sector capped the index's gains, with traders citing ongoing concern about regulation.
BNP Paribas, Barclays and Societe Generale fell between 2.7 and 3.5 percent.
Belgian supermarket group Delhaize fell 3.7 percent after Deutsche Bank cut its earnings estimates and its target price to 54 euros ($75.95) from 58 euros.
Strong company results have improved sentiment this week. Intel forecast upbeat fourth-quarter sales and margins on Tuesday, JPMorgan on Wednesday posted a 23 percent rise in quarterly profit and LVMH beat forecasts on Thursday, with a 14 percent rise in comparable third-quarter sales.
The technical picture improved as the blue-chip Euro STOXX 50 breached key resistance of 2,740.32, its 61.8 percent retracement of an April high to a May low, on Wednesday and edged up another 0.1 percent on Thursday.
Investors will watch the weekly U.S. jobless claims report, due at 1230 GMT, for indications on the strength of the economic recovery. (Additional reporting by Atul Prakash; Editing by Sharon Lindores) ($1=.7110 Euro)