* FTSEurofirst up 0.04 percent
* Banco Popolare, BPM rise after ECB sets merger conditions
* Generali down after earnings update
* Nordea falls as shares go ex-dividend, target price cut (Adds details, updates prices)
By Danilo Masoni
MILAN, March 18 (Reuters) - European shares steadied on Friday, with export-oriented auto stocks recovering as the euro lost some ground against the dollar, while oil stocks fell after a drop in crude prices.
The pan-European FTSEurofirst 300 index was up 0.04 percent at 1,340 points by 0950 GMT, reversing earlier losses. Traders said the expiry of futures and options was a source of volatility. The FTSEurofirst was still on course for its first weekly loss in five.
“The drop of the euro below 1.13 is giving some strength to equities,” ActivTrades analyst Carlo Alberto de Casa said. The euro fell against the dollar from Thursday’s five-week high after the Federal Reserve signalled fewer rate rises this year.
The European automobile index rose 0.8 percent, with shares in Volkswagen, Fiat Chrysler and Renault <RENA.PA) all gaining nearly 1 percent.
Banco Popolare rose 1.6 percent and Banca Popolare di Milano 0.5 percent after the ECB set conditions to approve their planned merger and asked for a multi-year industrial plan within a month.
Nordea Bank fell 7 percent, leading the losses on the FTSEurofirst, as the stock went ex-dividend and Societe General cut its price target, keeping its “sell” rating.
Generali fell 2.2 percent after reporting profit that rose less than expected because of writedowns on its equity holdings.
Energy stocks fell as crude oil prices dropped at the end of a fourth consecutive week of gains.
Today’s European research round-up (Reporting by Danilo Masoni, editing by Larry King)