LONDON, Oct 9 (Reuters) - European shares edged higher on Tuesday, bouncing back following sharp losses in the previous session, after a move by China to inject cash into the money market encouraged speculation it would announce more stimulus measures.
China's central bank pumped 265 billion yuan ($42.15 billion) into the markets via reverse bond repurchase agreements, the second-largest gross injection on record and raising hopes it could do even more to boost growth.
"Given the softness in the economy and given where inflation is, there is certainly scope for China to be more active on the policy front," Ian Richards, global head of equities strategy at Exane BNP Paribas, said.
"We are in a reporting season which is noisy, but between here and the end of the year I see the market higher. Higher beta cyclical names, financials in particular, had a pretty strong run and I am inclined to keep the money on those sectors."
At 0709 GMT, the FTSEurofirst 300 index of top European shares was up 0.3 percent at 1,103.80 points after falling 1 percent in the previous session.
Growth-linked sectors rose, with miners up 0.6 percent, auto shares gaining 0.5 percent and technology shares rising 0.6 percent.
(Reporting by Atul Prakash; editing by Simon Jessop)
((atul.prakash@thomsonreuters.com)(+44 20 7542 6189)(Reuters Messaging: atul.prakash.thomsonreuters.com@reuters.net))
Keywords: MARKETS EUROPE STOCKS/OPEN