European shares bounce back on domestic optimism

* FTSEurofirst 300 up 0.6 pct, Euro STOXX 50 up 0.8 pct

* Indexes bounce after steepest 3-day fall since June

* Spanish banks boosted by better growth prospects

* SKF, Getinge (Other OTC: GNGBF - news) rise after quarterly updates

By Francesco Canepa

LONDON, Jan 28 (Reuters) - European shares snapped a three-day fall on Tuesday, bouncing back on better growth prospects for Spain, encouraging updates from some industrial companies and a stabilisation in emerging market assets.

Sentiment was supported by expectations that more central banks in developing countries will follow India's surprise move on Tuesday and tighten policy to defend their battered currencies. That helped stem a rout in emerging markets that has hammered risky assets globally since last week.

Spanish banks were among Europe's top gainers, rising 1.9 percent after the country's Economy Minister Luis de Guindos said that gross domestic product would grow more than previously forecast this year.

Spain's IBEX index rose 1.2 percent, outperforming the pan-European FTSEurofirst 300 index, up 0.6 percent at 1,298.12, and the Euro STOXX 50, up 0.8 percent at 3,038.60 points.

The FTSEurofirst 300 had fallen 4.2 percent between Thursday and Monday, its steepest three-day fall since June 2013, as investors fretted about the combined effect of slower Chinese growth, reduced U.S. monetary stimulus and domestic problems in emerging countries from Turkey to Thailand.

Currency volatility in Turkey, Argentina and Indonesia was among headwinds cited by Philips (Amsterdam: PHIA.AS - news) as it forecast a slow start to 2014 on Tuesday, sending shares in the consumer electronics firm down as much as 4 percent in intra-day trade.

Yet European stocks in general, and especially those in the euro zone periphery, were seen by some as possible beneficiaries from the recent flight from emerging market assets, thanks to improving growth prospects in the euro zone.

"No need to bottom-fish in emerging markets just yet. We still find the euro zone recovery theme to be more interesting," said JP Morgan (Other OTC: JPYYL - news) 's European equity strategist Mislav Matejka.

Those views were based on the assumption that the emerging market rout would not spread sufficiently to jeopardise global growth.

"The perception among most investors is still that it's a temporary shock and not the start of a crisis," said Joost van Leenders, investment specialist for allocation and strategy at BNP Paribas Investment Partners.

"Our overweight in (developed market) equities is based on an improvement in the economies' outlook, which we think will lead to an improvement in earnings too."

SKF, the world's biggest bearings maker and a bellwether for global manufacturing, said it expected higher demand in the coming months as economic recovery takes hold on both sides of the north Atlantic (Frankfurt: 98S.F - news) and eclipses a slowdown in some emerging markets.

Shares in the company rose 5.5 percent in volume six times its average for the past 90 days.

Swedish medical technology firm Getinge rose 4.3 percent after saying its markets in western Europe had started to recover.

Sunrise Brokers' equity strategist Chris Mellor said the recent share price pullback could be a good opportunity to add to equity holdings in developed markets at cheap prices.

"I view the recent pull-back in equities as offering a buying opportunity rather than being a prompt to reduce our equities' overweight," said Mellor.

"The problems in emerging markets may have further to run but balanced against this we continue to see better data in the developed world," he said.