* FTSEurofirst 300 index up 1.3 percent
* Oil stocks index top sectoral gainer
* Italian banks surge on likely state support (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). Updates prices)
By Atul Prakash and Danilo Masoni
LONDON/MILAN, April 8 (Reuters) - European equities rebounded on Friday as Italian banks rallied and energy stocks advanced, although a pan-European index was headed for its fourth straight week of losses.
The STOXX Oil and Gas sub-index rose 3.5 percent to lead gains among sectors, as encouraging economic data from the United States and Germany helped oil prices to rally. Hopes that global oversupply could be ending helped as well.
Shares in BP, Total and Eni were all up by 3 to 4 percent.
Italian banks surged, with UniCredit gaining 8.6 percent, the biggest advance in the FTSEurofirst 300 index . Plans for a state-backed fund that would buy up bad loans and plug capital shortfalls at banks should be ready by Monday, media reported.
Shares in UniCredit, Italy’s biggest bank by assets, also got some support from optimism over a cash call at smaller rival Popolare Vicenza, which UniCredit is guaranteeing
Italian shares outperformed the broader market, with the benchmark FTSE MIB index rising 3.7 percent. Shares in Italian banks BMPS, Banco Popolare and UBI Banca jumped 8.5 to 10.3 percent.
The Italian government is keen to end concerns about the health of the banking system, which is burdened by 360 billion euros of bad loans.
The FTSEurofirst 300 index was 1.3 percent higher by 1420 GMT after falling 0.8 percent lower on Thursday, when the index slipped to a one-month low. It is still down nearly 10 percent this year and set for another weekly loss.
German shares, up 1.3 percent, were underpinned by a survey showing the country’s exports rose more than expected in February, a sign that foreign demand was picking up again.
German publisher Axel Springer rose 7.9 percent to a three-month high after JP Morgan upgraded the stock to “overweight” from “neutral”.
However, Gjensidige, UPM-Kymmene and Swisscom fell 3.4 to 6 percent, the worst three performers in the FTSEurofirst 300 index. The shares were trading ex-dividend: buyers would not get the latest dividend payout.
Today’s European research round-up
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Mike Dolan, Markets Editor EMEA. (Editing by Larry King)