European shares rebound on U.S. growth optimism
* FTSEurofirst 300 rises 1.2 percent by midday
* Investors react to late bounce on Wall Street
* A close above 200-day moving average critical
LONDON, July 8 (Reuters) - Europe's FTSEurofirst 300 index share index climbed back above its long-term moving average on Monday, following a late bounce on Wall St on Friday after strong U.S. jobs data.
German engineering giant Siemens was among the top gainers, climbing 5 percent after spinning off its lighting company Osram Licht.
The European blue-chip index was 1.2 percent higher at 1,177.39 points by 1112 GMT, having fallen 1.3 percent on Friday as the jobs data raised expectations the Federal Reserve will start scaling back its market-boosting stimulus soon.
"After the initial shock, markets seem to be realising that when there is less need for monetary stimulus, we will get the American economy in much better shape in return," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
"It will take a while for the mindset of investors to switch to this new reality. However, the bounce today shows this process is underway."
Shares also enjoyed a technical bounce. The euro zone's blue chip Euro STOXX 50 rose 1.3 percent to 2,628.91 points to trade above its 200-day moving average, now at 2,635 points, having failed to break through decisively last week.
"We are looking for a daily close above the 200-day moving average today and a subsequent close above the level tomorrow. If we manage, it would suggest the downward move since May has concluded and we could look to see more gains on the upside," Barclays Capital technical analyst Lynnden Branigan said.
He saw resistance at around 2,678, where a 25-point gap was left open between the trading days of June 19 and June 20, with downside support near the 23.6 percent retracement of a decline from a peak in May, when markets hit multi-year highs.
Analysts said the market is likely to remain choppy as companies report second quarter results over the summer.
"The pressure on stocks will persist in the medium term as the reporting season might disappoint. Especially the automobile and the machinery sector might see a marginal decline in earnings. We are 'underweight' both the sectors," said Christian Stocker, equity strategist at UniCredit in Munich.
U.S. aluminium major Alcoa starts the U.S. earnings season after the market close on Monday. Europe's reporting season kicks off later and will peak in the third week of July.
News of a deal to heal a rift in Portugal's governing coalition and signs Greece will secure its next tranche of aid also helped the positive tone.