European shares rise on German sentiment boost, stimulus bets

* FTSEurofirst 300 up 0.6 pct, Euro STOXX 50 up 1.2 pct

* ZEW beats expectations, boosts economic hopes

* Indexes underpinned by ECB stimulus speculation

* Trading in Areva halted as company suspends targets

By Francesco Canepa

LONDON, Nov 18 (Reuters) - European stocks rose for a second straight day on Tuesday, helped by an improvement in German economic sentiment and speculation about fresh monetary stimulus in the euro zone.

Frankfurt's DAX index rose 1.6 percent after the ZEW survey showed German analyst and investor sentiment rose in November for the first time in almost a year, beating expectations and raising hopes of growth after Europe's biggest economy narrowly avoided recession.

"We do think that the German economy is going to hold its growth momentum of this year into the next - so no major improvement but no disappointment," Matthias Thiel, a strategist at M.M. Warburg & CO in Hamburg, said.

The FTSEurofirst 300 index of top European shares closed 0.6 percent higher at 1,360.22 points, with the euro zone-only Euro STOXX 50 up 1.2 percent at 3,120.42 points.

The indexes were extending gains from the previous session, when European Central Bank President Mario Draghi underlined bank's readiness to do more to revive the economy if necessary.

"The European market is clearly driven by the ECB, and the fact that Draghi reaffirms the bank's determination to support the economy is positive," said Alexandre Baradez, chief market analyst at IG France.

Among individual stocks, British infrastructure group Balfour Beatty (Other OTC: BAFBF - news) rose 5.5 percent after reaffirming its profit outlook for the full year, and saying it had made progress in tackling management problems at its UK construction business.

Autos were the best-performing sector as data showed European new car sales rose 6.2 percent in October from year-ago levels. Volkswagen (Other OTC: VLKAF - news) shares rose 2.1 percent.

Shares (Frankfurt: DI6.F - news) in European cable and telecoms company Altice bucked the trend, falling 3.4 percent after private equity firms Carlyle and Cinven sold 7.5 million shares.

French nuclear group Areva, which had been up as much as 3.2 percent on Tuesday, turned lower in late trade before trading was halted. The company suspended its financial targets for next year and 2016, blaming delays to a Finnish reactor project, the delayed restart of Japan's reactors and a lacklustre nuclear market.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (Additional Reporting By Blaise Robinson in Paris; Editing by Susan Fenton/Ruth Pitchford)