European shares jump 4 pct, led by oils, banks

LONDON, Oct 17 (Reuters) - European shares jumped in early trade on Friday, tracking gains in the United States and Asia, as investors picked up battered banks, while energy shares were lifted by a rise in crude.

At 0716 GMT, the FTSEurofirst 300 index of top European shares was up 4 percent at 892.49 points.

Oil groups BP, Total and Shell climbed 5.1-6.3 percent as crude rose nearly $3 to just shy of $73 a barrel amid growing expectations of an OPEC production cut.

Italian bank UniCredit jumped 10 percent after Libyan interests said they held 4.2 percent of the group.

Intesa SanPaolo and HSBC gained 3.2 and 2.7 percent respectively.

The FTSEurofirst 300 index rose 10 percent on Monday and 3 percent on Tuesday, helped by efforts by governments to thaw interbank lending, but suffered falls of 6.5 percent and 5 percent on the next two days as fears of a recession took grip.

"This is the most volatile week we've seen," said Thierry Lacraz, strategist at Swiss bank Pictet in Geneva. "The sole intelligent thing is to remain on the sidelines and not make any huge bets."

"The global economic environment is still very negative, especially in the United States, where we've seen a dramatic drop in industrial production," he said.

But he added that falling oil prices would boost sectors like retail, and the reduction in interbank rates would be positive for October.

Across Europe, Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI posted gains of around 4 percent.

(Reporting by Sitaraman Shankar)