European shares rose in thin trade on Monday, led by carmakers after bullish broker comment buoyed the sector, as investors shrugged aside Standard & Poor's downgrade of nine euro zone countries and fresh worries about an unruly default in Greece.

Carmakers were the best performers, with the STOXX Europe 600 Automobiles & Parts index <.SXAP> up 3.1 percent after positive broker comment by Goldman Sachs gave support to the sector.

Carmakers are big exporters and have benefited from dollar strength, while Asian demand has been above expectations so investors are expecting earnings to improve, said Veronika Pechlaner, a manager on the Ashburton European equity fund.

Volume is thin, many had expected the S&P downgrades, but it is clearly not the end of the cuts and the ball is back in the court of the euro zone leaders. Greece is another evolving story as the negotiations have come to a halt.

The FTSEurofirst 300 <.FTEU3> index of top European shares provisionally closed up 0.8 percent at 1,025.64 points in low volume.

Sellers, however, came for Carnival which dropped 16.5 percent in strong volume after the owner of the cruise ship that capsized off Italy's west coast on Friday said it would take a $90 million hit from the accident.

(Reporting by Joanne Frearson)