European shares bounce back from three-week lows
* FTSEurofirst 300 up 0.3 pct, Euro STOXX 50 up 0.6 pct
* Euro zone PMIs, easing political tensions in Italy help
* Timing of U.S. data at issue after government shutdown
* "Stocks have moved ahead of earnings" -Valquant's Galiegue
PARIS, Oct 1 (Reuters) - European shares rose on Tuesday as easing political tensions in Italy and data showing euro zone factory activity growing for a third month in a row helped shares rebound from three-week lows.
Gains were limited, however, as a partial shutdown of the U.S. government after Congress missed a deadline for an agreement on a spending bill kept investors on edge.
At 0948 GMT, the FTSEurofirst 300 index was up 0.3 percent at 1,250.86 points. The benchmark is still down about 1.8 percent from a five-year high hit two weeks ago.
The euro zone's blue-chip Euro STOXX 50 index was up 0.6 percent at 2,909.35 points.
Italian shares bounced back from sharp losses on Monday. Milan's FTSE MIB rose 1 percent as dissent from within his People of Freedom Party complicated Silvio Berlusconi's plans to bring down the coalition government of Prime Minister Enrico Letta.
UBI Banca was up 2.4 percent, UniCredit up 1.7 percent, while French banks BNP Paribas and Credit Agricole - which both have significant exposure to Italy - were up 1.4 percent and 1.5 percent respectively.
Also lending support to euro zone stocks, data showed on Tuesday the region's factory activity grew for the third month running in September, as stronger demand enabled manufacturers to raise prices for the first time since mid-2012.
But the political impasse in Washington, where federal agencies have been directed to cut back services, potentially putting up to 1 million workers on unpaid leave, kept investors cautious. The deadlock also fuelled speculation about the timing of U.S. data releases.
"It's clear that the uncertainty can drag on a bit longer and that markets may lose patience and still correct some more," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
"Longer term, the fundamentals for higher equity prices remain in place as the world economy is picking up and quite a lot of money sits by the sidelines ready to come in."
Around Europe, Germany's DAX index was up 0.6 percent, France's CAC 40 up 0.7 percent and Spain's IBEX up 0.8 percent.
Britain's FTSE 100 index - whose companies derive nearly a quarter of their sales from the U.S. economy - was down 0.2 percent. A 3.8 percent drop in Unilever led losses after the consumer goods giant warned that a slowdown in its emerging markets had accelerated in the third quarter.
The news weighed on food and beverage stocks, with Heineken down 1.3 percent and AB Inbev down 2 percent.
"Stock prices have moved ahead of earnings, while the economic rebound has still to materialise," warned Valquant analyst Eric Galiegue, who recommends cutting equity exposure.
The recent rally in shares has propelled valuation ratios to levels not seen since 2009, with the broad STOXX Europe 600 trading at a 12-month forward price-to-earnings ratio of 13, according to Thomson Reuters Datastream.
The rise in the valuation ratio, however, reflects analysts' steady downgrading of earnings forecasts, with Europe's earnings momentum - upgrades minus downgrades as a percentage of total - currently at minus 2.9 percent.
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