European shares buoyed by economic data and earnings
* FTSEurofirst 300 up 10.88 points to 1,218.04
* Revival of factory activity in Europe boosts sentiment
* EasyJet guidance boosts airline shares
* ARM, Tate & Lyle and Kingfisher rise after updates
* Goldman Sachs ups 12-month view on European equities
LONDON, July 24 (Reuters) - Signs of economic revival in the euro zone and bullish earnings from companies including technology firm Arm and low-cost airline easyJet boosted European shares by midday on Wednesday.
By 1047 GMT, the FTSEurofirst 300 was up 10.88 points, 0.9 percent, to 1,218.04, while the euro zone blue chip index (STOXX) rose 1.1 percent to 2,753.13.
The short-term technical view for the STOXX remained bullish having found support on the 50 percent retracement level of 2,662 then the 38.2 percent level of 2,700, but it would need to break higher and close above 2,735 to target the all-important high of 2,822.
The main driver of gains in Europe on Wednesday was data showing factories in the euro zone increased output for the first time in well over a year, traders said.
But John Clarke, chief investment officer at GHC Capital Markets, said investors should not be getting too far ahead of themselves.
"As a short-term indicator the euro zone composite data has a tendency to under-predict the downside, which is why I concentrate on monetary trends," he said.
"The problem is as a monetarist you have seen no real pick up in bank lending ... and that makes me worried about the euro zone (growth)," he said.
Clarke said economic growth will drive a continued re-rating of equities, but he expects this to occur more in the United States and in part in the UK than the euro zone.
Earnings momentum remains in downgrade territory for all major European sectors except for airlines, according to Datastream.
Low-cost airline easyJet was a runaway success, its shares rising 7.7 percent and lifting the broader travel and leisure sector by 1.4 percent after issuing stronger-than-expected full-year profit guidance.
ARM, which designs chips for use in mobile computers and telephones including Apple's iPhone, rose 5.1 percent and helped lift the technology sector 1 percent after the UK-based firm beat expectations for its second quarter with a 30 percent rise in adjusted pretax profit.
British sweetener maker Tate & Lyle and Kingfisher , Europe's biggest home improvements retailer, climbed as much as 3 percent after their respective updates.
U.S. investment bank Goldman Sachs was more bullish on European equities, raising its rating over a 12-month timeframe to "overweight" from "neutral", arguing that the region's stock markets should be boosted by accommodative monetary policies and signs of an economic recovery.