* FTSEurofirst up 0.5 percent
* UK Q3 GDP beats expectations; outlook good for China
* Miners rise, Citi ups targets for precious metals stocks
* WPP, Daimler, France Telecom fall on earnings
By David Brett
LONDON, Oct 25 (Reuters) - European shares rose on Thursday
after China said factory output was set to accelerate and
Britain's economy grew faster than expected in the third
The FTSEurofirst touched a session high of 1,100.71
after data showing UK GDP rose 1.0 percent between July and
Growth was boosted in part by strong ticket sales for the
London Olympics, and the country's finance minister said
Britain still faced economic challenges at home and abroad.
"(This is) no time for shirts over the head in jubilation,"
a London-based trader said.
The index later pared gains and was up 5.29 points, or 0.5
percent, at 1,099.00, by 1030 GMT, trading within its recent
Basic resource stocks benefited after Chinese
officials said the country's factory output should grow faster
in the last three months of 2012 than in the third quarter.
Precious metal miners led gainers, with Citigroup raising
target prices across the sector. Fresnillo rose 2.6
percent after the investment bank upgraded its stance to
"neutral" from "sell".
Growing expectations that the Bank of Japan will unveil more
monetary stimulus at Oct. 30 policy meeting also underpinned the
For stock market investors, recent stimulus action by
central banks has been offset by fragile global economic growth
and a thus-far mixed third quarter earnings season, leaving the
FTSEurofirst stuck in a 30-point range since early September.
Finnish forestry group UPM-Kymmene, Britain's WPP
- the world's largest advertising group - and German
carmaker Daimler all fell after disappointing
France Telecom shed 2.4 percent after it slashed
its dividend as a price war in the sector weighed.
John Haynes, head of research at Investec Wealth &
Investment, said share markets could be set for a tough three
"We have a difficult earnings season upon us, some political
uncertainty in the U.S. ... at the same time in China you have a
power transition having a material impact on demand," he said.
But once those hurdles were cleared, equity investors could
be set for a decent 2013.
In the United States, 59.1 percent of companies have
reported earnings above analyst expectations so far, compared
with 67 percent over the past four quarters.
Against that subdued backdrop, the U.S. Federal Reserve has
said it would stick to its stimulus plan until the job market
In Europe, 43 percent of companies have so far missed
earnings forecasts, according to Thomson Reuters data.
Highlighting the still difficult economic environment, some
firms that reported on Thursday benefited from low investor
French drugmaker Sanofi and water and waste
company Suez Environment rose 2.6 and 4.7 percent
respectively after reporting profits slowed less than expected.
Credit Suisse gained 2.6 percent after saying it
would cut an extra 1 billion Swiss francs ($1.1 billion) of
costs and axe more jobs after its third-quarter net profit more
Earnings due in the United States could set the tone for
later in the session, with Apple, Amazon and
P&G set to report.