* FTSEurofirst 300 4.70 points at 1,272.79
* Luxury goods rebound after China GDP
* Expectations for longer liquidity in US supports equities
By David Brett
LONDON, Oct 18 (Reuters) - Robust Chinese growth data helped drive European equities higher early on Friday, with expectations the Federal Reserve will keep its stimulus in place following the U.S. fiscal standoff also supporting demand.
The world's second biggest economy grew 7.8 percent in the third quarter as forecast by analysts, allaying concerns of a sharper slowdown, although China warned of slowing momentum in the fourth quarter.
The personal and household goods sector, which includes the likes of Burberry and LVMH, both under pressure recently after warning of slowing sales momentum in China, was the top sectoral gainer, up 1 percent.
By 0734 GMT, the FTSEurofirst 300 was up 4.70 points or 0.4 percent at 1,272.79. Wall Street had gained overnight as equity markets sought to recover momentum lost during the extended government shutdown and political wrangling over the budget and debt limit in the United States.
"We are quite positive because (the U.S. budget standoff) is just postponing the end of quantitative easing (which has been among the main drivers of equities over the past 2 years)," said Claudia Panseri, global equity strategist at Societe Generale Private Banking.
"That said, liquidity is likely to support the equity markets more than growth because growth is still not there. So liquidity is a positive element."
The Stoxx Europe 600 index was up for a seventh successive day, its longest winning streak this year.
The prospect of more liquidity for longer has been reflected in the softening of 10-year yields on safe-haven government debt. Yields on U.S., German and British bonds had spiked ahead of the Fed meeting in September at which it was widely expected the U.S. central bank would begin to wind down its bond-buying.
The insurance sector made healthy gains. Prudential rose 3 percent with traders citing decent numbers overnight from Asian rival AIA.
Swedish hygiene and paper products maker SCA topped the list of European risers, gaining 5.2 percent after posting higher than expected third-quarter core earnings.
Elevator-maker Schindler rose 4.5 percent after it said it was launching a public repurchase offer for up to 5.8 percent of its registered shares and up to 8.9 percent of participation certificates in issue at a fixed price.
On the downside, Grifols fell 3.3 percent after investment bank UBS said it was to sell 2.72 percent of the blood products firm to institutional investors.
And Gecina dropped 3 percent after Grupo Prasa announced it is placing a 1.3 percent stake in the property group at 94.75 euros, below Thursday's closing price of 99.93 euros, traders said. GFCP.PA