Stronger autos help European shares to gain ground

* FTSEurofirst 300 index rises 0.4 percent

* Automakers race higher, up 1.5 percent

* French retailer Casino (Paris: FR0000125585 - news) top gainer on JP Morgan (Other OTC: JPYYL - news) upgrade

By Atul Prakash

LONDON, April 9 (Reuters) - European shares advanced on Wednesday, with automakers leading the market higher on a positive growth outlook for some major companies, although caution ahead of the European earnings season could keep gains under check.

The STOXX Europe 600 Automobile and Auto Parts index rose 1.5 percent, the top sectoral gainer, with Volkswagen (Berlin: VOW.BE - news) and Porsche up 3 percent and 4.2 percent respectively on a positive Bernstein note, traders said.

Bernstein raised its ratings on the two companies to "outperform" from "market-perform" and said Volkswagen (Other OTC: VLKAF - news) had extensive exposure to a European market recovery.

Automakers helped the FTSEurofirst 300 index of top European shares to gain 0.4 percent to 1,339.17 points by 0818 GMT after falling to its lowest level in more than a week in the previous session.

Analysts said the stock market needed some catalysts to resume its rally and focus would be on European earnings, which will gather pace later this month.

Alcoa (NYSE: AA - news) kicked off the U.S. earnings season by reporting a fall in first quarter adjusted profit late on Tuesday as aluminum prices dropped, but earnings came in ahead of analysts' expectations.

"We are cautiously optimistic about the first-quarter European reporting season and expect positive earnings growth in mid-single digit," Ronny Claeys, senior strategist at KBC Asset Management in Brussels, said.

"We need some really positive news on earnings and economic growth to start the market going again. Until then, equities could struggle to move strongly higher," he said adding that investors were also cautious due to the tension in Ukraine and stocks had become relatively expensive.

U.S. Secretary of State John Kerry accused Russian agents and special forces on Tuesday of stirring separatist unrest in eastern Ukraine, saying Moscow could be trying to prepare for military action as it had in Crimea.

Analysts said the market would focus on further data releases for hints about the market's near-term outlook. Wednesday's figures showed German exports fell more than expected in February while imports rose, narrowing the trade surplus in Europe's largest economy.

Among individual movers, French retailer Casino rose 4.8 percent, the biggest gainer on the FTSEurofirst 300 index, after JP Morgan raised its stance on the stock to "overweight" from "neutral" and raised its target price to 94 euros from 81 euros, traders said.

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

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

Today's European research round-up

(Editing by Alison Williams)