Dovish Fed minutes help European shares to rebound

* FTSEurofirst 300 index rises 1 percent

* Dovish Fed minutes help equities to bounce

* Spie drops IPO plan citing "volatile market"

By Atul Prakash

LONDON, Oct 9 (Reuters) - European shares bounced back on Thursday from the previous session's two-month lows on expectations the U.S. Federal Reserve will not start hiking interest rates until the economy is strong enough to absorb the move.

The FTSEurofirst 300 index of top European shares was up 1 percent at 1,332.34 points by 0752 GMT, after falling 0.8 percent in the previous session.

The market rallied following the release late on Wednesday of the minutes of the Fed's Sept. 16-17 meeting. The Fed expressed concern the rising dollar could slow a needed rebound in inflation and highlighted economic turmoil in Europe and Asia, another factor behind its stance towards keeping an accommodative policy for the near future.

"Overall the Fed still seems to be very cautious and that might lend some support to equity markets. It has to sharpen its forward guidance in the next policy meeting, given the problems that we still see in the global economy," Gerhard Schwarz, head of equity strategy at Baader Bank (Xetra: 508810 - news) in Munich, said.

"The market probably will find it hard to get a big support coming from fundamentals as we still have ongoing problems in Europe. But if earnings for the third quarter are not as bad as feared, then that could help the market to gain faith again."

Aluminium major Alcoa (NYSE: AA - news) kicked off the U.S. reporting season on Wednesday by posting a stronger-than-expected increase in third-quarter profit.

The European earnings season will gather pace in the third week of October. Analysts said the recent sharp slide in the euro and commodity prices is set to provide tailwind for European firms struggling against economic weakness, and soon break a streak of earnings downgrades that has already lasted 3-1/2 years.

Despite the day's rebound in European equities, the sharp sell-off started in mid-September is starting to have a negative impact on capital market activities. French energy services firm Spie ( SPIE.PA) canceled its IPO on Thursday, blaming 'volatile market conditions'.

Analysts said the share market remained vulnerable following Europe's poor economic outlook. The FTSEurofirst 300 index had fallen 6.5 percent over the past three weeks before Thursday's rebound.

Figures showed on Thursday German exports slumped by 5.8 percent in August, their biggest fall since the height of the global financial crisis in January 2009, in yet another sign that Europe's largest economy was faltering.

Among individual sharp movers, miners Fresnillo (Other OTC: FNLPF - news) and Randgold Resources rose 5.2 percent and 7 percent respectively, with traders citing dovish Fed minutes as being more supportive for the gold price.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (Editing by Tom Heneghan)