China stimulus talk helps European shares edge up

LONDON, Oct 9 (Reuters) - European shares edged higher onTuesday, bouncing back following sharp losses in the previoussession, after a move by China to inject cash into the moneymarket encouraged speculation it would announce more stimulusmeasures.

China's central bank pumped 265 billion yuan ($42.15billion) into the markets via reverse bond repurchaseagreements, the second-largest gross injection on record andraising hopes it could do even more to boostgrowth.

"Given the softness in the economy and given where inflationis, there is certainly scope for China to be more active on thepolicy front," Ian Richards, global head of equities strategy atExane BNP Paribas, said.

"We are in a reporting season which is noisy, but betweenhere and the end of the year I see the market higher. Higherbeta cyclical names, financials in particular, had a prettystrong run and I am inclined to keep the money on thosesectors."

At 0709 GMT, the FTSEurofirst 300 index of topEuropean shares was up 0.3 percent at 1,103.80 points afterfalling 1 percent in the previous session.

Growth-linked sectors rose, with miners up 0.6percent, auto shares gaining 0.5 percent and technologyshares rising 0.6 percent.

(Reporting by Atul Prakash; editing by Simon Jessop)

((atul.prakash@thomsonreuters.com)(+44 20 7542 6189)(ReutersMessaging: atul.prakash.thomsonreuters.com@reuters.net))