* FTSEurofirst 300 rises 1.5 percent
* LSE shares surge on possible counter-offer
* Autos higher as euro hits one-month lows
* Glencore underperforms miners, Barclays slumps (Updates with closing prices)
By Danilo Masoni and Atul Prakash
MILAN/LONDON, March 1 (Reuters) - European shares rose on Tuesday, with exchange operator London Stock Exchange (LSE) hitting record highs on speculation of a possible bidding war and auto stocks boosted by continued weakness in the euro.
Shares in LSE rose 7.2 percent after U.S. rival ICE said it was considering making an offer for the group, a move that could derail Deutsche Boerse's potential tie-up with the British company. Deutsche Boerse was little changed.
"With ICE now also being interested, it looks ... more likely for a deal to be done," said Dafydd Davies, partner at Charles Hanover Investments.
The pan-European FTSEurofirst 300 index closed up 1.5 percent at 1,332.95 points, its highest level since Feb. 1.
The index extended earlier gains after stronger than expected U.S. manufacturing data sent the euro -- already weakened by a poor euro zone manufacturing survey -- to a fresh one-month low against the dollar.
The weaker euro in turn boosted shares in auto firms, which benefit from currency weakness because that makes exports cheaper. The STOXX Europe 600 Auto index rose 3.1 percent, making it the biggest sectoral gainer.
"The market and auto stocks are supported by the lower euro," said Stefan de Schutter, trader at Alpha Trading in Frankfurt, adding that relatively upbeat newsflow about the Chinese market from the Geneva car show also helped.
BMW climbed 4.2 percent after its CEO Harald Krueger said he expected slight sales growth this year thanks to growth in China and Europe. Peugeot and Fiat Chrysler , were up 4.3 percent and 5.3 percent respectively, while Volkswagen added 4.6 percent.
Earlier in the day, the market got support after activity in China's manufacturing sector shrank more sharply than expected in February, raising hopes that authorities in Beijing would announce further stimulus measures.
Glencore underperformed a positive mining sector after reporting $5.8 billion of charges, mostly due to a slide in commodity prices, and a 32 percent fall in 2015 core profit.
Its shares fell 2 percent, with traders linking the fall to profit-taking after a recent strong run and to management comments surrounding the urgency of asset sales to cut debt.
Barclays fell 8.1 percent after the British bank posted lower profits, slashed its dividend and announced a restructuring entailing the sale of its Africa business. (Additional reporting by Kit Rees in London; editing by Gareth Jones)