REFILE-Europe stocks cling to gains, boosted by miners

(Fixes Reuters Instrument Code for iTraxx Crossover)

* FTSEurofirst 300 up 0.2 percent

* Miners rally along with commodities

* Banks sinks in volatile trade

By Patrizia Kokot

LONDON, Aug 20 (Reuters) - European shares clung to gains in midday trade on Wednesday with help from miners and heavyweight oil stocks, though banks remained volatile.

By 1037 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.2 percent at 1,161.27 points.

Mining stocks and oil heavyweights were the biggest advancers as oil edged up above $115 a barrel, while copper and aluminium prices rose.

The DJ Stoxx European basic resources index rallied 3.4 percent with Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) adding 6 percent and Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) gaining 4 percent. BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) and Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) all added between 1.5 and 2.3 percent.

Oil explorer Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) jumped 6.7 percent after UBS raised its recommendation on the stock to "buy" from "neutral".

Banks turned in a choppy session, following steep losses on Tuesday. The DJ Stoxx European banks index was down 0.7 percent in midday trade, with UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) up 0.7 percent, Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) down 3.6 percent and Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) down 0.4 percent.

The banks index is down more than 30 percent since the beginning of the year and there is still no end in sight to the current crisis, according to Commerzbank strategist Markus Wallner in Frankfurt.

"We remain underweight in banks. We have seen that some investors switched from commodities into banks but that only really worked for two weeks. The credit crunch is definitely not over," Wallner said.

"The banks are controlled by the credit market and the iTraxx Crossover index <ITEXO5Y=GF> is rising towards 3-year highs again," he added, noting that the iTraxx is historically negatively correlated to the banking sector.  Continued...