* European, U.S. shrug off China's falling stocks
* UK GDP, U.S. Fed in focus
* Brent oil 6-month low
By Jamie McGeever
LONDON, July 28 (Reuters) - European stocks snapped a
five-day losing streak on Tuesday, with merger activity and
earnings news lifting major markets by more than 1 percent, as
investors shrugged off another fall in Chinese stocks and Brent
oil's slide to a six-month low.
The rebound in Europe looked set to extend to the United
States. Futures markets pointed to a rise of more than 0.5
percent on Wall Street.
Britain published the first snapshot of second quarter
economic activity of any G7 country earlier on Tuesday,
reporting gross domestic product grew 0.7 percent, up from 0.4
percent in the first quarter.
The U.S. Federal Reserve begins its two-day policy meeting
later. No change in interest rates is expected, so attention
will focus on whether Fed chair Janet Yellen signals September
or December as the most likely date for a rate increase.
"For me, China is a short blip rather than a real slowdown.
What we are hearing from company management is pretty buoyant,
even if we see the dramatic impact on stock prices and on the
wealth effect," said Ingo Speich, portfolio manager at Union
Investment in Frankfurt.
"The earnings outlook in the euro zone is rising compared to
the U.S. and companies are reporting pretty decent numbers," he
said.
At 1100 GMT, the FTSEuroFirst 300 index of leading European
shares was up 1.2 percent at 1,548 points .FTEU3 .
Germany's DAX .GDAXI was up 1.4 percent at 11,211 points,
France's CAC 40 .FCHI up 1.2 percent at 4,988 points and
Britain's FTSE 100 .FTSE up 1 percent at 6,563 points.
Shares in Kering PRTP.PA surged 6.6 percent after Gucci,
the flagship brand of the French luxury and sportswear group,
posted a 4.6 percent rise in underlying second-quarter sales.
And RSA Insurance Group RSA.L jumped 11 percent after
Zurich Insurance ZURN.VX said it was considering a bid for the
British group, which has a market capitalization of 4.4 billion
pounds ($6.9 billion).
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS ended the day 0.2 percent higher
after falling nearly 1 percent early on, touching its lowest
level since July 9. ID:nL3N1081IT
Tokyo's Nikkei .N225 ended 0.1 percent lower.
The main China indexes fell again, although by nowhere near
as much as Monday's 8.5 percent plunge. The Shanghai market
benchmark .SSEC closed 1.7 percent lower.
After hitting a peak in early June, China's main indexes
dropped by a third in less than a month, rebounded by a quarter,
then saw their biggest one-day decline since 2007 on Monday.
ID:nL3N1081IT
Authorities in Beijing said they would redouble their
efforts to shore up the market, something that could help soothe
nerves in Western markets as well.
DOMESTIC FOCUS
Oil remained under pressure. Brent crude futures hit a new
six-month low after Monday's Chinese stock market crash bred
worries the world's biggest energy consumer may cut back demand,
leading to a global supply glut. O/R
Brent fell as much as 2 percent to $52.28 LCOc1 , a level
not seen since February 2. U.S. crude CLc1 was down 1 percent
just below $47 a barrel, its lowest since late March.
The price of copper CMCU3 , heavily influenced by demand
from key consumer China, recovered from Monday's six-year low
and was up 1 percent at $5,245 a tonne on the London Metal
Exchange.
The broader Thomson Reuters CRB commodities index .TRJCRB
also hit a six-year low overnight.
In currency markets, the dollar rose against many of its key
rivals, including the euro and yen, as traders bet that the
first U.S. rate hike in almost a decade is still likely to come
in September.
"Undoubtedly the Fed has had its eye on China - and the
other on Greece - when it comes to watching overseas
developments," said Steve Barrow, head of G10 strategy at
Standard Bank.
"There's been some concern that either could blow away any
thoughts of lift-off this year, but we very much doubt it. We
think the Fed will stay focused on the domestic economy and will
start to lift rates in September."
The euro was down 0.5 percent at $1.1035 EUR= , almost a
full cent down from Monday's two-week high of $1.1129, and the
dollar was up almost 0.5 percent against the yen at 123.75 yen
JPY= .
Investors will also be looking to U.S. earnings on Tuesday
and economic data releases, including Markit PMIs for July and
CaseShiller house prices for May.
Bond yields edged higher, with the 10-year U.S. Treasuries
yield up 2 basis points at 2.25 percent US10YT=RR and UK and
German yields up around 1 basis point.