* FTSEurofirst 300 flat, off lows after UK, German data
* Standard Chartered rebounds despite profit fall
* Credit Agricole boosted by profit rise
* Fresnillo hit after div cut, profit fall
By David Brett
LONDON, Aug 6 European shares nudged higher on Tuesday as signs of a faster-than-expected recovery in the UK and German economies helped the FTSE 100 and the DAX recoup early losses.
By 1053 GMT, the FTSEurofirst 300 was up 0.1 percent at 1,226.24, while the index of euro zone blue chip shares was up 0.55 points at 2,809.63.
Britain's FTSE 100 rebounded off a session low after data showed UK manufacturing grew much more strongly than expected in June, following on the heels of strong services sector data on Monday and suggesting the UK recovery is broadening.
Germany's DAX recovered from a shaky start too, up 0.2 percent at 8,418.84 after data showed industrial orders surged by 3.8 percent on the month in June, their biggest rise since October.
Ronald Doeswijk, chief strategist at Robecco, however, said the data would only provide a short-term boost for markets.
"It is comforting to see that producer confidence is suggesting that we have seen the bottom, but on the other hand we think that austerity as well as a financial system that is not willing to lend money to companies will still suppress growth for a longer time," he said.
Loose monetary policy by major central banks would continue to support equities, but for a longer-term recovery earnings need to improve before Robecco turns more positive on Europe, Doeswijk said.
In the short term the FTSEurofirst 300 and the STOXX50e were facing hurdles with both indexes in overbought territory, according to their nine-day relative strength indicators, and with indexes approaching the year highs they reached in May.
"The dog days of summer have arrived and after a profitable run from the late June lows, equity investors might just be anticipating a period of consolidation, assuming a quieter spell of macro and political news," said Ian Williams, equity strategist at Peel Hunt.
In a results-heavy session banks were very much in focus.
Asia-focused bank Standard Chartered rallied 3.5 percent following a recent underperformance. While it reported a 16 percent drop in first-half profits, its shares were lifted by a robust outlook and exposure to growth in Africa and India.
French bank Credit Agricole rose 3.9 percent after reporting a rise in quarterly profit.
Europe's largest bank HSBC, however, fell 0.8 percent as Deutsche Bank cut its rating on the company to "hold" from "buy". The shares extended losses after a 4.4 percent fall on Monday when the bank reported weaker-than-expected results.
Away from the banks, Deutsche Post and Sky Deutscheland rose 3 percent and 5.6 percent after their respective updates.
On the downside, German-based Lanxess, the world's largest maker of synthetic rubber for tyres, slid 6.4 percent after issuing a profit warning.
Precious metals miner Fresnillo shed 5.4 percent after cutting its dividend and reporting falling first-half profits.
Reinsurer Munich Re was down 4 percent after its second-quarter net profit fell sharply on flood claims.
Earnings expectations continue to be downgraded for European companies, with third-quarter estimates cut by an average of 3 percent for those companies which have already reported earnings in the current quarter, according to Starmine data.