* FTSEurofirst 300 up 0.5 percent
* Insurers gain on consolidation speculation
* Pharmaceuticals, banks among broad but shallow rally
By Simon Falush
LONDON, Sept 30 (Reuters) - European shares rose early on Wednesday, lifted by strength among pharmaceuticals and insurers, as investors looked to add to gains on the final day of an exceptionally strong quarter.
At 0837 GMT the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,007.07 after gaining 0.1 percent on Tuesday.
The benchmark index is up 21 percent this year and has surged 55.9 percent from a record low in early March. It has jumped 18.7 percent since the end of June -- on track for its best quarter in almost a decade.
Banks were higher, shrugging off early weakness as risk appetite remained relatively strong. Barclays, BNP Paribas and Allied Irish Banks were up 0.2 to 3.1 percent.
"We're coming to the end of a very strong quarter and there is some marking up still going on ... people are saying 'we've made a nice profit, lets not spoil it' but I think there's massive room for disappointment," said Philippe Gijsels senior equity strategist at Fortis Bank, in Brussels.
He noted that U.S. consumer confidence data on Tuesday was disappointing and that there was further scope for weak data to spook the markets.
Pharmaceuticals were also positive. Astrazeneca, Novartis and Elan added 0.2 to 1.5 percent.
Insurers were up, with consolidation talk boosting the sector. Old Mutual, Prudential Swiss Life and ING Groep added 1.7 to 2.5 percent.
But Legal & General topped the sector, up 4.8 percent, boosted by an upgrade to "hold" from "sell" by Deutsche Bank as well as ongoing speculation that it might be the target of a bid from Resolution.
Across Europe, Germany's DAX, France's CAC and Britain's FTSE 100 were up 0.2 to 0.4 percent.
MINERS GAIN
Miners were broadly stronger as metal prices gained.
Rio Tinto, Xstrata, Lonmin, Anglo American and Kazakhmys gained between 0.2 and 1.1 percent.
But some investors were sceptical about whether the rally can be sustained into the year-end.
"The theme will be -- we're coming out of recession, but where is the growth coming from?," said Justin Urquhart-Stewart, investment director at Seven Investment Management.
"The rally will run out of steam, but investors who were stuck in cash will still want to get in, so bring the yo-yos out."
Man Group, the world's largest hedge fund, topped the leaderboard by gaining 7.8 percent after it said slowing outflows helped lift assets to an estimated $43.8 billion at end-September. Raiffeisen was among the top European risers, up 4.1 percent after BofA-Merrill Lynch added it to its Europe 1 and EEMEA 1 lists.
Smiths Group was the top gainer in Europe, up 6.3 percent, after the technology company reported full-year results showing a 21 percent fall in underlying full-year results, which analysts say were better than feared.
But Marks & Spencer dipped 1.5 percent after analysts said the better-than expected sales and profit margins were factors into a recent rally in shares while a downgrade in its cost guidance was not.
But chemicals producers were the biggest drag on the index.
BASF and Solvay fell 0.8 and 0.9 percent respectively while Bayer fell 3.9 percent after UBS removed it from its European chemicals "most preferred list".
Later investors' attention will turn to economic data in the United States, including the ADP Employment report. The final reading of GDP data for the second quarter is expected to show that the economy shrank at an annualised rate of 1.2 percent. (Reporting by Simon Falush; Editing by Hans Peters)