* FTSEurofirst 300 rises 1.3 percent but down for the week
* Banks, commodity shares gain
* Volkswagen, Porsche fall
By Dominic Lau
LONDON, June 19 (Reuters) - European shares rose on Friday on prospects that the global economic recovery was still on track following recent improving economic data, with banks and commodity stocks leading the gainers.
The FTSEurofirst 300 index of top European companies closed 1.3 percent higher at 861.63 points on a "triple witching" day, after rising 0.6 percent on Thursday to snap a four-session losing run.
Triple witching is the expiry of stock index futures, stock index options and single stock options.
The index, however, lost 2.7 percent this week -- the second weekly loss since early March, which was the start of current rally that has seen the pan-European benchmark up 33.5 percent from the lifetime low hit on March 9.
"The third quarter when we start seeing the earnings coming through and the corporate statements that come with it will be the most interesting time," said Philip Lawlor, chief portfolio strategist at Nomura.
Lawlor said any indication from major companies that things were not as bad as they had thought or order books were starting to firm up would send the market higher.
Banks were among the top gainers, with Barclays, Banco Santander, Standard Chartered, BBVA, Credit Agricole and Societe Generale up between 1.2 and 5 percent.
European Union leaders agreed more steps to avert a repeat of the banking crisis that has sapped the world economy and the International Monetary Fund said 2010 might deliver stronger growth than earlier forecast.
Morgan Stanley downgraded its euro zone growth forecast for 2009 to minus 4.4 percent from minus 3.3 percent but said it was starting to see upside risk building on its 2010 forecast of 0.5 percent growth.
Insurers were also higher, helped by a positive sector note from Deutsche bank. The broker upgraded price targets for Aviva and AXA, which gained 5.8 percent and 1.1 percent, respectively. Index heavyweight oil producers were in demand, buoyed by firmer crude prices. BP, Royal Dutch Shell, Total, Repsol and BG Group put on 0.6 percent to 3.8 percent.
Firmer metal prices also lifted mining shares, with Xstrata , Vedanta Resources, BHP Billiton, Fresnillo, Lonmin and Anglo American rising 2 percent to 5.6 percent.
Across Europe, Britain's FTSE 100 rose 1.5 percent, Germany's DAX was flat and France's CAC 40 advanced 0.9 percent.
Volumes on the FTSEurofirst 300 were nearly 140 percent of its 90-day average daily volume.
VOLKSWAGEN, PORSCHE DOWN
Porsche was down 1.4 percent after the car maker said big gains on derivatives bets linked to Volkswagen shares offset a decline in nine-month earnings at its core sports car business. Volkswagen ordinary shares shed 3 percent.
Within the auto sector, Daimler slipped 2.7 percent and BMW lost 1.5 percent.
Telenor dropped 4 percent after Russia's bailiffs service said it had passed an order to auction off Telenor's shares in mobile firm Vimpelcom to cover a $1.7 billion fine for holding back Vimpelcom's entry into Ukraine. (Editing by Sue Thomas)