* FTSEurofirst 300 erases part of early losses
* Some say concerns about New York Ebola case overdone
* BASF retreats after cutting 2015 earnings forecast
* Luxury goods group Kering falls after lower Gucci sales
By Sudip Kar-Gupta
LONDON, Oct 24 (Reuters) - European shares pared early losses on Friday as investors bet the fallout for the banking sector from stress test results due on Sunday should be contained, and took a more measured view of New York's first case of Ebola.
The banking index rose 0.3 percent, boosted by hopes that the weekend update on the sector's financial health from the European Central Bank should not reveal too many problems.
Banca Monte dei Paschi di Siena shares surged 8 percent as traders said the bailed-out Italian lender could pass the health checks relatively unscathed.
The FTSEurofirst 300 index of top European shares fell 0.2 percent to 1,316.44 points by the middle of the trading session.
It earlier declined as much as 0.6 percent on news a New York City doctor who treated Ebola patients in West Africa had become the first person to test positive for the virus in the U.S. financial hub.
Joe Rundle, head of trading at ETX Capital, told Reuters Insider Television that one of the problems about Ebola was that investors still could not quantify the kind of impact it might have on the world economy.
"People have no idea how to price it," said Rundle. (reut.rs/103vt9h)
Others felt the Ebola worries might be exaggerated.
"I think the fears are a bit overdone. In previous cases, such as avian flu, the virus ended up being contained quite quickly," said Caroline Vincent, European equities fund manager at Cavendish Asset Management.
The concerns relegated the latest batch of data from the European earnings season to a subsidiary role.
Luxury goods group Kering fell 4.2 percent, making it the worst-performing stock on the pan-European FTSEurofirst 300 index after sales fell at its Gucci brand.
Chemicals company BASF declined by 2.6 percent after cutting its 2015 earnings forecast on weak demand in its European home markets.
Global truck maker Volvo outpaced the market, jumping 10 percent after a surprise rise in core earnings.
The FTSEurofirst 300 index has rebounded slightly this week to put it on course for its best week since December 2013, but many investors have still continued to slash exposure to European equities, which have been knocked back over the last month by weak European economic data.
U.S.-based funds invested in European shares seeing outflows for a third straight week, according to Lipper data.
A Lipper survey of 109 U.S.-domiciled funds investing in European shares, including exchange-traded funds (ETFs), showed redemptions of $958 million in the seven days to Oct 22, adding to the record weekly outflows of $1.33 billion from last week.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (additional reporting by Blaise Robinson, Francesco Canepa and Stephen Jewkes, editing by John Stonestreet)