* FTSEurofirst 300 flat, Euro STOXX 50 down 0.4 pct
* Indexes set 5-year highs before pullback
* ECB's surprise rate cut boosts exporters
* Peripheral banks hit as ECB holds fire on new LTRO
* Strong US data raises expectations of early Fed taper
LONDON, Nov 7 (Reuters) - European shares ended flat on Thursday in heavy, volatile trade as a boost from an unexpected rate cut by the European Central Bank was offset by funding concerns for smaller banks.
The pan-European FTSEurofirst 300 index ended flat at 1,296.95 points after earlier hitting a new five-year high of 1,316.42 points when the ECB cut its main interest rate.
But the bank's failure to offer a new round of cheap 3-year loans, known as LTRO, fuelled concerns about banks in the periphery and stronger-than-expected U.S. GDP data curbed monetary stimulus bets ahead of a key jobs report on Friday.
The ECB cut interest rates to a record low and said it could take them lower still to prevent the euro zone's recovery from stalling.
"This will further the nascent recovery of activity that we have seen since the start of the summer," said Sandra Crowl, a member of Carmignac de Gestion's Investment Committee, which has 55 billion euros ($74.40 billion)under management.
"You'd anticipate the higher beta stocks, so the autos, the banks and industrial stocks would benefit the most."
The European auto, engineering and personal goods sectors rose by between 0.6 percent and 1.5 percent.
The euro fell after the rate cut, a positive development for euro zone companies that sell their goods abroad.
"This (the rate cut) will give European exporters much-needed breathing space, with the euro currency finally falling back," said David Thebault, head of quantitative sales trading at Global Equities in Paris.
Among exporters, tyre maker Continental and sportswear manufacturer Adidas rose 6.8 percent and 4 percent respectively, also boosted by well-received quarterly updates.
Italian banks and smaller lenders across the periphery, however, fell after the ECB's president Mario Draghi said there was no meaningful discussion about a new LTRO, which would help weaker institutions.
"Almost certainly ... the ECB will not offer a new LTRO to the European banks," Matt Spick, an analyst at Deutsche Bank, said.
"Most larger banks did not want LTRO funding anyway due to perceived stigma, but this could hurt smaller banks."
Italy's FTSE MIB and Spain's Ibex fell 2.1 percent and 1 percent respectively, with investors keen to take profit on Europe's best-performing indexes, up 18 percent and 20 percent year to date.
The broader Euro STOXX 50 index fell 0.4 percent to 3,042.98 points after setting a five-year high at 3,106.64 points.
Also weighing on European stocks in late trade were concerns about when the Federal Reserve might cut back on its stimulus after data showed the U.S. economy grew faster than expected in the third quarter. Non-farm payrolls data for October, seen as a key gauge of U.S. economic health, will be published on Friday.
The 1.8 percent gap range between Thursday's intraday low and high on the STOXX Europe 600 index was the widest since July 4, when Draghi signalled rates may be cut further and the Bank of England said investors had been too quick to price in rate hikes.
Trading volume was 31 percent and 65 percent higher than the FTSEurofirst 300 and the Euro STOXX 50 respective averages for the past three months, Thomson Reuters data showed.