European shares led higher by Casino; Burberry slumps

* FTSEurofirst 300 up 1.4 percent

* Results lift French retailer Casino

* Burberry slumps as China slowdown leads to sales miss

* Eyes on earnings and U.S (Other OTC: UBGXF - news) . consumer prices data (Updates with closing prices)

By Danilo Masoni and Alistair Smout

MILAN/LONDON, Oct (HKSE: 3366-OL.HK - news) 15 (Reuters) - European shares rose on Thursday, bouncing back after three days of losses, with retailer Casino and consumer goods maker Unilever (NYSE: UL - news) lifted by positive results.

The pan-European FTSEurofirst 300 index closed up 1.4 percent at 1,425.44 points, while the euro zone's blue-chip Euro STOXX 50 index rose 1.5 percent, with investors betting on a continued easy monetary policy environment.

U.S. consumer prices recorded their biggest drop in eight months in September as the cost of gasoline fell, confirming a low-inflation environment.

"With U.S. rates not likely to go up any time soon, China stabilising and markets having come off substantially from their highs over the past few months, some feel increasingly tempted to take advantage of generally lower valuations," said Peregrine & Black trader Markus Huber in a note.

French retailer Casino rose 6.1 percent, after quarterly sales showed a marked improvement in its home market that beat some analyst expectations. However the decline in sales accelerated in the period, hit by weak consumer electronics demand in its top market of Brazil and by the August bombings in Thailand.

"This is a good set of sales results for Casino. The bad news in Latin America, mainly Brazil, and Thailand was known before," Bernstein analysts, who rate the stock with an outperform rating, said.

Unilever rose 3.6 percent after the consumer goods maker reported better-than-expected third-quarter sales, although it added that sluggish global markets continued to weigh on its performance.

Burberry fell 8.3 percent after a sharp sales slowdown in China and Hong Kong led the British luxury goods company to miss forecasts for first-half sales growth and warn of an increasingly challenging environment.

A tumultuous summer for global markets has dampened expectations for this earnings season, with analysts expecting a 13.5 percent fall in year on year growth, according to Thomson Reuters Starmine data.

Strategists at JP Morgan said in a note that all the major European countries they track are seeing more earnings downgrades than upgrades, with Italy and Spain in particular experiencing a major reversal of their upward earnings trend.

TeliaSonera (Amsterdam: 1087941.AS - news) fell 3 percent after U.S. short-seller Muddy Waters revealed it had a short position in the Swedish firm, and made serious criticisms of it. It (Other OTC: ITGL - news) closed off its lows after TeliaSonera dismissed the criticism. (Editing by Andrew Roche/Ruth Pitchford)