European shares rebound after U.S data but Eutelsat plunges

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report)

* European stock markets climb back after U.S (Other OTC: UBGXF - news) data

* Eutelsat (Paris: FR0010221234 - news) drops around 30 percent after outlook cut

* Ubisoft rises after posting higher sales

By Sudip Kar-Gupta

LONDON, May 13 (Reuters) - European shares rebounded from losses earlier in the session on Friday, as strong U.S. retail sales data buoyed markets, although satellite company Eutelsat plunged 30 percent after slashing its outlook.

The pan-European FTSEurofirst 300 index had spent much of the day in negative territory, then swung back up to stand 0.6 percent higher following the U.S figures.

The data showed U.S. retail sales in April recorded their biggest increase in a year, suggesting that the world's biggest economy was regaining momentum after growth almost stalled in the first quarter.

"The strong U.S. data has lifted European markets, and we are fairly bullish in the medium term," said MB Capital trader Rick Jones.

French video games maker Ubisoft climbed 8.3 percent after higher sales and a bullish outlook.

But Eutelsat's 30 percent fall made it the worst-performing stock in the region. The satellite company cut its outlook late on Thursday and suffered ratings downgrades on Friday.

"Such a heavy hit to forecasts, coming from across the applications, will knock confidence in the story," Barclays (LSE: BARC.L - news) ' analysts wrote in a note, downgrading Eutelsat to "equal-weight" from "overweight".

European markets have sagged in recent weeks, with some investors blaming strength in the euro, uncertainty before Britain's vote on June 23 on European Union membership and a political stalemate in Spain.

The FTSEurofirst remains down by around 10 percent so far in 2016, and the International Monetary Fund (IMF) said on Friday that a vote by Britain to leave the EU next month could hit the global economy and world stock markets.

The euro dipped against the dollar on Friday after the U.S. currency rose following the U.S retail sales data, but some fund managers remained cautious on European equities.

"We're quite cautious about the European market even though valuations are not expensive. Before taking big bets, investors need to know what will happen on the political front and where the euro will go," said Matteo Ramenghi, Chief Investment Officer at UBS WM Italy.

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

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Mike Dolan, Markets Editor EMEA. (Additional reporting by Danilo Masoni in Milan; Editing by Andrew Heavens)