European shares bounce back as Chinese data reassure

Wed Apr 16, 2014 4:11am EDT

* FTSEurofirst 300 up 0.7 pct, reverses previous day's slide

* Euro STOXX 50 up 0.9 pct, moves back above 50-day moving average

* Credit Suisse, Danone drop after posting lower results

By Blaise Robinson

PARIS, April 16 (Reuters) - European shares rose early on Wednesday, reversing the previous session's losses as data showed economic growth in China a touch above forecasts, while gains in Tesco also lifted markets.

Shares in the world's No.3 retailer gained 3.9 percent, bouncing after a 15 percent slide in two months as traders said the fall in profits reported by the group was not as steep as some had feared.

"Tesco this morning was not quite as bad as expected," said Berkeley Futures associate director Richard Griffiths.

At 0750 GMT, the pan-European FTSEurofirst 300 index was up by 0.7 percent at 1,316.50 points. Earlier this month, the index hit a near six-year high, but the rally has been stalled by worries over the crisis in Ukraine as well as concerns about the pace of Chinese growth.

Data showed on Wednesday China's economy grew at its slowest pace in 18 months in the first quarter, at 7.4 percent, though the figure was slightly stronger than the median forecast of 7.3 percent in a Reuters poll.

After being hammered on Tuesday, shares in mining companies - among the most sensitive to Chinese data - regained ground, with both Anglo American and BHP Billiton up 0.4 percent.

Credit Suisse lost 2.7 percent after its first-quarter net profit fell by more than a third as revenue from bond trading tumbled, raising question marks over the bank's investment banking strategy.

Danone fell 2.1 percent after posting a drop in quarterly sales.

Around Europe, UK's FTSE 100 index was up 0.6 percent, Germany's DAX index up 0.8 percent and France's CAC 40 up 0.8 percent.

The euro zone's blue-chip Euro STOXX 50 index was up 0.9 percent to 3,118.05 points, moving back above its 50-day moving average, sending a positive technical signal.

"The range is pretty flat in the short term, but the longer-term bullish momentum is intact, so people should take advantage of the dip to buy," Aurel BGC chartist Gerard Sagnier said.

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today's European research round-up

(additional reporting by Sudip Kar-Gupta in London; Editing by John Stonestreet)