* FTSEurofirst 300 up 0.6 pct, ESTOXX 50 up 0.8 pct
* FTSEurofirst breaks three-day losing streak
* Spanish banks buoyed as economy recovers
* Siemens rises after Q1 results
* Emerging markets concerns still linger in background
By Sudip Kar-Gupta
LONDON, Jan 28 European shares bounced back from
near one-month lows on Tuesday, helped by a rise in Spanish
banks and higher profits at German engineer Siemens although the
sharp sell-off in emerging markets continued to concern
Some traders and analysts said any gains this week could be
limited as expected cuts in U.S. monetary stimulus and fears
that Chinese growth is slowing may further hit emerging
economies that are dependent on foreign capital and exports.
Others, however, said the emerging markets slump could drive
flows of money into western Europe, where some of the region's
main economies are slowly recovering from the effects of the
euro zone's prolonged sovereign debt crisis.
"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.
The pan-European FTSEurofirst 300 index, which had
fallen for the last three sessions to its lowest level in more
than a month, bounced up 0.6 percent to 1,298.48 points in
The euro zone's blue-chip Euro STOXX 50 index
also advanced 0.8 percent to 3,039.50 points.
Gains in the FTSEurofirst 300 were driven by major Spanish
banks such as Santander and BBVA, and
Germany's Siemens, which reported a 15 percent rose
in quarterly profit.
MORE SIGNS OF SPANISH RECOVERY
Spanish banks and Spain's IBEX equity index in
general have outperformed this year as Spain's economy has shown
signs of recovery.
Economy Minister Luis de Guindos said on Tuesday that gross
domestic product would grow by close to 1 percent this year
compared to the current official forecast of 0.7 percent.
Dan Ison, European equities fund manager at Threadneedle
Investments, said Spain and Ireland - also emerging from an
economic crisis - were among his favoured markets for 2014.
Spain's IBEX is down 0.1 percent since the start of 2014,
outperforming a 1.3 percent fall in the FTSEurofirst 300, while
Dublin's ISEQ equity index is up more than 2 percent.
"Spain can easily finance itself in open markets, and
Ireland has recently conducted its first bond sale since the
bailout," said Ison.
JP Morgan's Matejka backed banks among his favoured European
equity sectors, while Sunrise Brokers' equity strategist Chris
Mellor said the current pullback could be a good opportunity to
add to equity holdings 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 added.