* FTSEurofirst 300 up 0.6 pct, Euro STOXX 50 up 0.8 pct
* Indexes bounce after steepest 3-day fall since June
* Spanish banks boosted by better growth prospects
* SKF, Getinge rise after quarterly updates
By Francesco Canepa
LONDON, Jan 28 European shares snapped a
three-day fall on Tuesday, bouncing back on better growth
prospects for Spain, encouraging updates from some industrial
companies and a stabilisation in emerging market assets.
Sentiment was supported by expectations that more central
banks in developing countries will follow India's surprise move
on Tuesday and tighten policy to defend their battered
currencies. That helped stem a rout in emerging markets that has
hammered risky assets globally since last week.
Spanish banks were among Europe's top gainers, rising 1.9
percent after the country's Economy Minister Luis de Guindos
said that gross domestic product would grow more than previously
forecast this year.
Spain's IBEX index rose 1.2 percent, outperforming the
pan-European FTSEurofirst 300 index, up 0.6 percent at
1,298.12, and the Euro STOXX 50, up 0.8 percent at
The FTSEurofirst 300 had fallen 4.2 percent between Thursday
and Monday, its steepest three-day fall since June 2013, as
investors fretted about the combined effect of slower Chinese
growth, reduced U.S. monetary stimulus and domestic problems in
emerging countries from Turkey to Thailand.
Currency volatility in Turkey, Argentina and Indonesia was
among headwinds cited by Philips as it forecast a slow
start to 2014 on Tuesday, sending shares in the consumer
electronics firm down as much as 4 percent in intra-day trade.
Yet European stocks in general, and especially those in the
euro zone periphery, were seen by some as possible beneficiaries
from the recent flight from emerging market assets, thanks to
improving growth prospects in the euro zone.
"No need to bottom-fish in emerging markets just yet. We
still find the euro zone recovery theme to be more interesting,"
said JP Morgan's European equity strategist Mislav Matejka.
Those views were based on the assumption that the emerging
market rout would not spread sufficiently to jeopardise global
"The perception among most investors is still that it's a
temporary shock and not the start of a crisis," said Joost van
Leenders, investment specialist for allocation and strategy at
BNP Paribas Investment Partners.
"Our overweight in (developed market) equities is based on
an improvement in the economies' outlook, which we think will
lead to an improvement in earnings too."
SKF, the world's biggest bearings maker and a
bellwether for global manufacturing, said it expected higher
demand in the coming months as economic recovery takes hold on
both sides of the north Atlantic and eclipses a slowdown in some
Shares in the company rose 5.5 percent in volume six times
its average for the past 90 days.
Swedish medical technology firm Getinge rose 4.3
percent after saying its markets in western Europe had started
Sunrise Brokers' equity strategist Chris Mellor said the
recent share price pullback could be a good opportunity to add
to equity holdings in developed markets at cheap prices.
"I view the recent pull-back in equities as offering a
buying opportunity rather than being a prompt to reduce our
equities' overweight," said Mellor.
"The problems in emerging markets may have further to run
but balanced against this we continue to see better data in the
developed world," he said.