* FTSEurofirst 300 index up 0.26 percent
* Auto index set for best week since 2011
* Deutsche Bank down 1.8 percent after clean-up
* Credit Suisse hit by report over planned capital raising
* Telefonica down on reported mobile merger doubts (Adds closing prices)
By Danilo Masoni
MILAN, Oct 8 (Reuters) - European shares closed higher on Thursday as auto stocks gained, but investors remained wary about the global economic outlook and the upcoming earnings season.
The pan-European FTSEurofirst 300 index closed up 0.26 percent. The euro zone's blue-chip Euro STOXX 50 index was little changed.
After a rally this week that brought indexes off the nine-month lows they reached at the end of September, some investors were heading for the sidelines before the start of the U.S. earnings season. Economic data in Germany and Japan heightened concern over global growth.
"Markets will probably tread water a little bit because there is still the possibility of some further disappointment coming from the economic newsflow and there is uncertainty about U.S. earnings," said Gerhard Schwarz, head of equity strategy at Baader Bank in Munich.
Aluminum giant Alcoa will report results after the close, considered the official start to the earnings season.
In Europe, Deutsche Bank shares fell 1.8 percent after it reported a record pre-tax loss of 6 billion euros ($6.77 billion) in the third quarter and warning investors of a possible dividend cut.
But the stock went through a volatile session, at one point gaining over 3 percent. Some analysts argued the company's decision to cut or skip dividend payments would allow it to avoid a capital increase.
Other traders and analysts said Deutsche Bank's plans to take large writedowns at its investment banking unit made sense as a "kitchen-sink" exercise, covering all contingencies.
Banks overall were the biggest losers for the day. Credit Suisse fell 3.6 percent after the Financial Times said it was preparing a "substantial capital raising" when it discloses its strategy on Oct. 21.
Auto shares < .SXAP> rose 0.8 percent and were set for their best weekly gain since 2011, as investors turned more optimistic after Volkswagen admitted rigging tests on emission.
Investors are unwinding negative bets on car makers, one trader said, while JPMorgan analysts said the upcoming quarterly results season would be "supportive" for its rebound.
Fiat Chrysler rose 3.9 percent amid optimism for the listing of its luxury sports car unit Ferrari in the second part of October. In addition, an agreement with U.S. unions averted a threatened strike.
Coloplast fell 4.1 percent, leading losers on the FTSEurofirst 300 index. UBS downgraded the Danish healthcare company to "sell" from "neutral" and cut its target price to 375 crowns from 500.
Spanish phone group Telefonica fell 1.3 percent after reports that the head of British regulator Ofcom suggested she has doubts on a planned merger between O2 and Three. Telefonica has agreed to sell O2 to Three.
Today's European research round-up ($1 = 0.8862 euros) (Additional reporting by Sudip Kar-Gupta, Alistair Smout and Alasdair Pal in London; Editing by Tom Heneghan)