GLOBAL MARKETS-Banks lift European shares, platinum surges

(Updates to close)

By Natsuko Waki

LONDON, Feb 18 (Reuters) - Banks drove European shares sharply higher on Monday ahead of key earnings data later this week which will show their progress in writing down losses related to U.S. subprime mortgages.

Platinum, meanwhile, raced to new historic highs while the the dollar rose against a basket of major currencies after hitting a 1-1/2 week low last week following disappointing U.S. data.

Oil climbed above $96 a barrel, helping to erase earlier losses in emerging market assets.

Weekend news that the British government is to nationalise Northern Rock NRK.L, which fell victim last year to a jump in interbank lending rates as a result of the credit crisis, also helped sentiment among British banks.

The FTSEurofirst 300 index closed up 2 percent while the DJ STOXX bank sector index was up 2.5 percent.

MSCI's main world equity index .MIWD00000PUS gained 0.5 percent. U.S. financial markets were closed for Presidents Day holiday.

This week's earnings results from scandal-hit French bank Societe Generale (SOGN.PA: Quote, Profile, Research), peer BNP Paribas (BNPP.PA: Quote, Profile, Research) and Britain's Barclays (BARC.L: Quote, Profile, Research) will show the global banking sector's progress in writing down an estimated $300-400 billion of subprime losses.