* FTSEurofirst 300 up 0.7 pct, Euro STOXX 50 up 0.8 pct * Supportive money market comments from Chinese central bank fuel rebound * Arm rises as investors hunt for bargains By Francesco Canepa LONDON, June 25 (Reuters) - European shares rebounded on Tuesday after steep falls, with some investors encouraged back into the market by comments from China that calmed concerns about a credit crunch there. The pan-European FTSEurofirst 300 index was up 0.7 percent at 1,121.84 points at 0754 GMT, having shed 5.5 percent in the previous three sessions on an expected curbing of U.S. monetary stimulus and a spike in Chinese interbank rates. China's central bank said on Tuesday that it would guide rates to reasonable levels. "This is some market friendly-stuff," a senior trader in London said. The comments helped in autos, banking and mining shares rise 1.3-2 percent. China is the world's biggest consumer of raw materials. Chip maker Arm Holdings, which has fallen 32 percent since late May, added 3.9 percent to 788 pence to be among the top risers as Investec recommended investors to buy the shares at the current cheaper price, upgrading the stock to "buy" from "hold" and increasing its price target to 1,000 pence from 995. Ishaq Siddiqi, strategist at ETX Capital, said his clients were cashing in on their short positions, or bets on a market fall. But he said the trend for European shares remained negative and expected Britain's FTSE to fall to 5,900 by Friday. That index traded 0.4 percent higher at 6,053.98 points, holding above technical support at 6,000, which served as a resistance level in 2011-12. The Euro STOXX 50 Volatility index, or VSTOXX, which measures option prices on euro zone blue chips and is regarded as a gauge of market tensions, eased 2.6 percent from a nine-month high hit on Monday. The Euro STOXX 50 index was up 0.8 percent at 2,532.60 points.