* FTSEurofirst 300 ends roller-coaster session up 0.1 pct
* Nokia tumbles 11 percent on surprise loss, big writedown
* Sainsbury surges 10 percent on renewed takeover talk
* Index's P/E ratio at highest since May 2006
By Blaise Robinson
PARIS, Oct 15 (Reuters) - European stocks ended slightly higher on Thursday, helped by takeover fever in the retail sector, but gains were limited by Nokia's surprise loss and big writedown that knocked down tech shares.
The FTSEurofirst 300 index of top European shares closed the roller-coaster session 0.1 percent higher at 1,017.26 points, after rising to as high as 1,024.34, a level not seen since Oct. 7, 2008.
Retail stocks rose, with J Sainsbury Plc jumping 10 percent on market talk that Qatar's sovereign wealth fund was planning a renewed offer for the British grocer, after a previous bid attempt failed in 2007.
Volume on Sainsbury shares represented 1,081 percent percent of the stock's 90-day average daily volume.
The M&A buzz propelled shares of UK retailers, with Tesco up 1.7 percent, Wm Morrison Supermarkets up 1.8 percent and Kingfisher up 2.1 percent.
Banks ended the session mixed, with HSBC down 2.1 percent and Deutsche Bank up 0.7 percent, after results from Goldman Sachs and Citigroup failed to impress investors a day after JPMorgan posted forecast-beating profits that fuelled earnings hopes.
Citigroup posted a quarterly per-share loss as it suffered $8 billion of credit losses, while Goldman's quarterly earnings rose, but its shares dropped on Wall Street on disappointment that so much of the profit came from trading gains that might not be sustainable.
The big credit losses at Citigroup revives concerns over the health of the U.S. economy, said Victor Peiro Perez, head of strategy at Caja Madrid Bolsa.
"Negative earnings, especially if it's coming from the banks, could prompt a sector rotation on the market," he said.
"Financial stocks have already priced in an economic recovery and could reach a plateau, while other stocks, such as shares of software makers, still have room on the upside."
Banking stocks, hammered in 2008, have surged 175 percent since the stock market hit a floor in early March.
Nokia tumbled 11 percent after the world's top cellphone maker unveiled a big writedown at its struggling networks unit and posted a drop in its smartphone sales from the previous quarter.
TECH SHARES TAKE A BEATING
"Profit margins are under pressure ... Nokia needs to do some serious cost cutting to adjust to weaker demand," said Christian Blaabjerg, chief equity strategist at Saxo Bank.
"We expect sales to drop more because consumers are debt-haunted in Europe and in the U.S., making it very unlikely that they will replace their cellphone with a newer model any time soon," he said.
Tech shares took a beating, with Alcatel-Lucent down 2.3 percent, Infineon down 3.7 percent and Atos Origin down 4.5 percent.
Around Europe, UK's FTSE 100 index fell 0.6 percent, Germany's DAX index shed 0.4 percent, and France's CAC 40 inched 0.03 percent higher.
The FTSEurofirst 300 has surged 57 percent since reaching a record low in early March, but is still down 38 percent from a multi-year peak reached in mid-2007.
The sharp seven-month rebound has propelled European stocks to their highest valuation levels in nearly 3-1/2 years. Stocks in the FTSEurofirst 300 index currently trade at 14.19 times expected earnings, the index's highest price-to-earnings ratio since May 2006, according to Thomson Reuters data. (Editing by Rupert Winchester)