GLOBAL MARKETS-Upbeat data help European shares hold gains

* European shares bounce, helped by PMI data

* Yen, bonds higher as investors stick to safety

* Euro held back before ECB meets

* U.S. stock futures in the red

By Marc Jones

LONDON, Feb 5 (Reuters) - Upbeat economic data helped European shares break a three-day run of losses on Wednesday, offsetting some unconvincing company earnings and jitters about emerging markets.

Overnight trading in Asia had been mixed despite a rebound on Wall Street, but January purchasing manager index (PMI) data helped settle European nerves before the European Central Bank's monthly meeting on Thursday.

The pan-regional FTSEurofirst 300 .FTEU3 was up 0.4 percent after the data. Outperforming Italy, Spain and Portugal bolstered gains of 0.4, 0.3 and 0.2 percent in London .FTSE , Paris .FCHI and Frankfurt .GDAXI .

Markit's euro zone Composite PMI, which gauges business activity across thousands of companies and is seen as a good guide to economic health, climbed to 52.9 in January from 52.1 the previous month. News Search ID:nL9N0IM04S That was the highest final reading since June 2011.

It showed the recovery of the 18-member bloc is broad-based, Markit said, with Germany leading an upswing in peripheral members amid signs of a stabilisation in number two economy France.

"The euro zone PMI was down slightly on the earlier flash reading but nevertheless signals a very encouraging start to the year," said Chris Williamson, Markit's chief economist.

It was welcome news following data hiccups from the world's biggest economies, the U.S. and China, earlier this week.

Dealers cautioned, however, that the mood remained brittle and it would only take a poor U.S. payrolls report on Friday to set the bears running again. ECONUS The ADP reading on private hiring is due later on Wednesday, and investors are likely to react badly to any disappointment.

In Asia, the strain clearly took a toll. Demand for safety in the yen and top-rated bonds grew on a roller-coaster day for Toyko's Nikkei .N225 and more losses for Chinese stocks.

The Nikkei eventually closed up 1.2 percent, but swings throughout the day meant it never got close to testing resistance at the 200-day moving average. The index has shed 14 percent this year following last year's 50 percent boom.

YEN EFFECT

The faltering performance was all the more disappointing as some major corporate names reported upbeat earnings, helped by the yen's recent plunge. Panasonic Corp 6752.T jumped 17 percent after its quarterly earnings more than tripled. Toyota Motor Corp 7203.T rose 5 percent after it predicted record annual profits.

On Wall Street, the Dow .DJI had ended Tuesday up 0.47 percent and the S&P 500 .SPX added 0.76 percent. But stock futures were trading lower on Wednesday, with the S&P e-mini contract off 0.3 percent ESc1 .

The underwhelming bounce in the Nikkei led investors to again bid up the safe-haven yen, with the dollar dipping to 101.36 yen JPY= from an early top of 101.77.

"The key will be the U.S. data, and any missing of forecasts will challenge the global recovery story and push dollar/yen towards the 100.60 support," said Jeremy Stretch, the head of currency strategy at CIBC World Markets.

The euro eased a touch to $1.3510 EUR= and German Bund yields DE10YT=TWEB returned to six-month lows, still driven by speculation that the threat of deflation might nudge the European Central Bank into easing policy on Thursday.

The major mover in currencies was the Australian dollar, which surged after the country's central bank on Tuesday shut the door on further rate cuts.

The Aussie was enjoying the view at $0.8910 AUD=D4 after climbing a steep 2 percent overnight. It also rallied against the euro and yen as speculators abandoned short positions in what had been a very crowded trade.

TREASURY HUNT

The reluctance to take risks led to demand for U.S. Treasuries, with the 10-year yield ticking down to 2.61 percent

US10YT=RR , not far from the recent three-month low at 2.57 percent.

Gold =XAU got a slight boost but remained sluggish at $1,255.60 an ounce.

In commodities, prices for wheat were boosted by dry weather and deteriorating crop conditions in the United States. Soymeal and corn were in high demand.

Broad gains in grains and natural gas lifted the Thomson Reuters/Core Commodity Index .TRJCRB 1 percent, the biggest one-day gain in nearly a month.

U.S. oil futures CLc1 rose on bets on a reduced stockpile at a key delivery point caused by the start-up of a major pipeline. The March NYMEX contract CLc1 added 64 cents to $97.84 a barrel. Brent crude LCOc1 rose 42 cents to $106.20.

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(Additional reporting by Anirban Nag in London, Wayne Cole in Sydney; Editing by Larry King)

((marc.jones@thomsonreuters.com)(+44)(0)(207 542 9033)(Reuters Messaging: marc.jones.thomsonreuters.com@reuters.net))

 
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Keywords: MARKETS GLOBAL/