* FTSEurofirst 300 index gains 2.4 percent
* Euro zone banking stocks rise sharply
* Mining, energy stocks track commodities prices (Updates prices, adds details)
By Atul Prakash
LONDON, March 11 (Reuters) - European shares bounced back on Friday, with a recovery in metal and oil prices boosting commodities stocks and the European Central Bank's new cheap funding plan supporting lenders in the euro zone periphery.
The pan-European FTSEurofirst 300 index was up 2.4 percent to 1,342.42 points by 1527 GMT, after falling 1.8 percent in the previous session.
The banking stocks index was up 4.1 percent, the top sectoral gainer, after choppy moves on Thursday when the ECB cut rates and said it would start buying corporate debt and even pay banks that lent to companies in an attempt to kickstart growth.
Lenders like Banco Popular and Bankia of Spain and Italy's UniCredit and Intesa Sanpaolo jumped 7 to 11 percent.
The broader European stock market fell in the previous session and the euro rose after ECB President Mario Draghi said more rate cuts were unlikely, but bank shares outperformed on plans for a new round of cheap funding.
"While markets had a tantrum after Draghi's comment about not seeing rates going further into negative territory, we still see yesterday's announcement as net positive," Mike van Dulken, head of research at Accendo markets said.
"The overnight recovery in market sentiment suggests markets may be coming round to a similar view, the ugly indigestion finally subsiding."
Citi advised clients to buy European bank stocks saying they were relatively immune to the euro strength and looked a lot cheaper, and to short industrials because of their foreign exchange sensitivity, rich valuations and poor earnings trends. The industrials index was up 2.8 percent.
Commodities-related stocks were also in demand after prices of metals and crude oil rose. The European oil and gas index advanced 2.6 percent as oil prices rose than 2 percent.
Miners climbed 2.8 percent after prices of major industrial metals rose sharply. Glencore, Anglo American and Rio Tinto all rose over 2 percent.
However, Exane BNP Paribas said it was turning more cautious on the mining sector after a recent relief rally.
"The sector has outperformed by 17 percent from early February lows, when our 12-month valuation metrics displayed an average upside of about 30 percent for the miners," it said.
"In this environment where visibility is low, we would advocate taking a more defensive approach as most metal markets remain unbalanced and therefore even more exposed to macro data volatility," the broker added.
Today's European research round-up (Additional reporting by Danilo Masoni in Milan; Editing by Ruth Pitchford)