UPDATE 3-ECB lifts most European shares, banks and insurers suffer

* STOXX up 0.3 percent

* ECB keeps policy, guidance unchanged

* Banks main losers from Draghi's presser

* DAX outperforms as autos rally (Adds closing price)

MILAN, Sept 7 (Reuters) - European shares closed in positive territory on Thursday after the European Central Bank reaffirmed its ultra-easy policy stance and said details on the future of its massive stimulus would come in October.

While the pan-European STOXX 600 index rose 0.3 percent at the end of a choppy session, European bourses didn't all end on a positive note.

Paris, London and Frankfurt posted gains from 0.3 to 0.7 percent but Milan and Madrid ending in the red, down 0.4 and 0.1 percent respectively due to heavy losses in their banking and financial sectors.

ECB President Mario Draghi's cautious comments raised the chance that the central bank will opt to phase out its 2.3 trillion euro ($2.8 trillion) bond buying scheme only very slowly next year, a possibility which hurt financial shares.

The banking sector whose lending business benefits from higher interest rates, fell 0.8 percent as fears grew that the strength in the euro could delay monetary policy tightening.

Among top euro zone bank decliners were Spain's Sabadell and Italy's Banco BPM down 3.6 and 2.6 percent respectively.

"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.

While financial stocks were hurt, the rest of the market was comforted by the fact that the ECB was in no rush to end its stimulus to the economy.

A fifth day of gains in auto stocks helped German shares shrug off a spike in the euro as cheap valuations have revived investor interest in the sector.

Carmakers were a bright spot, up 0.4 percent. 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.

All was not positive in the sector however with Ferrari falling 6.9 percent after a double downgrade from Morgan Stanley to "underweight" from "overweight."

Elsewhere 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 Toby Chopra)