PARIS, May 24 (Reuters) - European stocks are set to bounce back on Friday as bargain hunters move in following the market's biggest one-day drop in nearly a year, betting that the sharp five-week rally fuelled by central bank liquidity will soon resume. At 0628 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were up 0.1-0.4 percent. European stocks sank on Thursday, with the FTSEurofirst 300 index losing 2.1 percent as concerns the U.S. Federal Reserve could soon start to reduce its stimulus measures sparked a bout of profit-taking in equities worldwide. Seeking to temper the worries, St. Louis Fed President James Bullard said on Thursday that he did not think the Fed was "that close" to taking any such decision. "The market was ripe for a pull-back, it was just a matter of getting a trigger for it. Very few investors have been hedging their long positions lately, so yesterday's drop triggered stop losses across the board," a Paris-based trader said. "But with so many investors still on the sidelines, we should get a 'buy the dip' rebound today or in the coming days." U.S. shares slipped on Thursday but ended sharply off their session's lows, while Japan's Nikkei share average rose on Friday, rebounding from the previous day's 7.3 percent plunge which has prompted some investors to scale back their exposure to Japanese stocks. "The selling pressure we are witnessing is not a reflection of changed fundamentals but a liquidity issue," Ian Richards, global head of equities strategy at Exane BNP Paribas, said in a note. "The most obvious challenge to the positive, liquidity induced trend in markets this year will come when the Fed decide to lower the level of stimulus. This looks unlikely until the autumn. In turn this suggests the near-term balance of risks facing equity investors remains favourable." Investors will keep an eye on Germany's Ifo business climate index, due at 0800 GMT, likely to shed light on the outlook for Europe's biggest economy. Data showed on Friday that private consumption helped Germany eke out meager economic growth of 0.1 percent in the first quarter of the year, compensating for declines in exports and investment. ---------------------------------------------------------------- ---------------- MARKET SNAPSHOT AT 0628 GMT: LAST PCT CHG NET CHG S&P 500 1,650.51 -0.29 % -4.84 NIKKEI 14,612.45 0.89 % 128.47 MSCI ASIA EX-JP 548.52 0.12 % 0.64 EUR/USD 1.2936 0.01 % 0.0001 USD/JPY 101.62 -0.38 % -0.3900 10-YR US TSY YLD 2.002 -- -0.01 10-YR BUND YLD 1.429 -- -0.01 SPOT GOLD $1,389.91 -0.06 % -$0.79 US CRUDE $93.90 -0.37 % -0.35 > GLOBAL MARKETS-Asian stocks shaky, Nikkei still seen vulnerable > US STOCKS-Wall St sags, but ends off session lows; HP hits 52-wk high > Nikkei rises 0.9 pct in turbulent session after Thursday's plunge > Dollar falls more than one yen from day's high > PRECIOUS-Gold climbs as Fed official says no rush to end bond buying > METALS-Copper rises but China woes dim demand outlook > Oil prices set for biggest weekly loss in five COMPANY NEWS: TELECOM ITALIA Telecom Italia has pushed to the end of the month a decision on whether to spin off its fixed-line access network, which is proving more complex than expected due to political and regulatory considerations. NOVO NORDISK The world's biggest insulin producer said late on Thursday that Phase III study results had shown people treated with its liraglutide drug had an 8 percent weight loss. SMITHS GROUP In the nine months to 4 May 2013, Smiths Group grew underlying revenue across all divisions. Underlying headline operating profit was also ahead of the same period last year. Expectations for the year remain in line with the outlook given at the interim results in March. HSBC HSBC's controversial $1.9 billion settlement deal with the U.S. authorities over money laundering charges has stalled after a row between the justice department and the judge overseeing the case, The Guardian reports. BANKIA Small investors in shares of in Spain's nationalised lender Bankia suffered new massive losses on Thursday as the stock plunged by more than 50 percent amid an abnormally high volume of trading which the stock market regulator said would be looked at closely. CREDIT SUISSE Credit Suisse Group CSGN.VX has named Jeff Douthit as new co-head of its investment banking department in Chicago, according to an internal memo to staff that was reviewed by Reuters. VOLKSWAGEN The head of Volkswagen's works council, Bernd Osterloh, said ahead of the second round of wage negotiations at the carmaker that the wage agreement at VW should be better than the industry-wide agreement, German paper Handelsblatt reported. SOLARWORLD The European Commission rejected Chinese trade association statements that talks to resolve a dispute over allegations of dumping of solar panels had broken down, while Chinese comments highlighted risks the dispute could escalate.