* STOXX up 0.5 percent
* ECB keeps policy, guidance unchanged
* Banks steady after three days of losses
* DAX outperforms as autos rally (Adds details on ECB, updates prices)
MILAN, Sept 7 (Reuters) - European shares rose on Thursday after the European Central Bank reaffirmed its ultra-easy policy stance and said details on cutting its massive stimulus would come in October.
A fifth day of gains in auto stocks, however, helped German shares shrug off a spike in the euro as cheap valuations have revived investor interest in the sector.
While the pan-European STOXX 600 index was up 0.5 percent, the export oriented German blue-chip index rose 1 percent to its highest level in more than six weeks.
The euro jumped to a nine-day high as the ECB broadly stuck to its outlook for growth and inflation while outlining concerns about the single currency's strength.
"We still expect that the ECB will continue to take steps towards a tighter policy framework in a very gradual manner," said Handelsbanken Capital economist Rasmus Gudum Sessingö.
"Today's message confirmed our expectation that the October meeting will include an extension of the QE program that currently is set to expire end December, but also details of the banks tapering plans," he added in a note.
A trader at a European bank said any stimulus extension would be welcomed by stock investors, while the move in the euro had little impact given the sharp swings already seen in August, when the single currency broke above the key $1.20 level.
Almost all sectors traded in positive territory, while Europe's banking index steadied after three straight days of losses.
Banks, whose lending business benefits from higher interest rates and yields, have been under pressure recently after strength in the euro fuelled talk the ECB could delay monetary policy tightening.
Among top euro zone bank decliners were Spain's Sabadell and Italy's UniCredit, down 2 and 0.7 percent respectively, while BNP Paribas added 1.1 percent and Deutsche Bank added 0.6 percent.
The head of the heavyweight German lender on Wednesday called on the ECB to change course on providing cheap money, despite the strong euro, warning he sees price bubbles in stocks, bonds and property.
Carmakers were a bright spot, up 0.9 percent and on track for their fifth straight day of gains.
Traders said investors were lured by cheap valuations, expectations that sales could be driven up by people replacing cars damaged during hurricanes in the United States, while efforts by German Chancellor Angela Merkel to avert bans of diesel vehicles in some cities also buoyed interest.
Ferrari lagged with a fall of 5.5 percent after a double downgrade from Morgan Stanley to "underweight" from "overweight".
Tobacco firm Imperial Brands rose 2.8 percent after selling part of its stake in Spanish logistics company Logista .
British outsourcer Capita fell 2.4 percent after restating its 2016 profit following accounting changes.
(Reporting by Danilo Masoni; Editing by Dale Hudson and Pritha Sarkar)