European shares rally as Yellen reassures

* FTSEurofirst 300 up 1.3 pct, Euro STOXX 50 up 1.5 pct

* Fed chair's comments on job market, stimulus cuts reassure

* L'Oreal sinks as stake buyback impact disappoints

By Blaise Robinson

PARIS, Feb 11 (Reuters) - European stocks rose on Tuesday, boosted by positive corporate results and as new Federal Reserve Chair Janet Yellen emphasized there would be continuity in the U.S. central bank's strategy.

In her first public comments as Fed chief, Yellen said the Fed was on track to keep trimming stimulus but acknowledged the labour market recovery was "far from complete." She made clear there would be no abrupt changes to monetary policy.

"Yellen is in line with (previous Fed chair Ben) Bernanke's approach. It brings visibility on the Fed's action, we now know where they are going. This is quite reassuring for investors," said David Thebault, head of quantitative sales trading at Global Equities.

"The lights are turning 'green' again, and investors are coming back to equities."

The U.S. central bank has trimmed its asset purchases twice since December, encouraged by momentum in the economy in late 2013. But after mixed macro data including Friday's lower-than-expected payrolls and turmoil in emerging markets, investors had been seeking clarification from the Fed.

Market players also saw a potential headwind removed on Tuesday when U.S. Republican leaders caved in to demands from President Barack Obama and agreed to advance legislation raising Washington's borrowing authority.

The FTSEurofirst 300 index of top European shares ended 1.3 percent higher at 1,317.30 points, while the euro zone's blue-chip Euro STOXX 50 index added 1.5 percent at 3,077.08 points.

Shares in car makers Volkswagen (Other OTC: VLKAF - news) and BMW (Berlin: BMW.BE - news) gained 2.6 and 2.9 percent respectively after positive January sales figures, while French media group Lagardere (Paris: FR0000130213 - news) surged 5.3 percent after raising its profit forecast for fiscal 2013.

"So far in the earnings season, operational results have been good, which shows that business models are solid. However, net results have suffered from currency swings," State Street (Frankfurt: ZYA.F - news) global Advisors fund manager Olivier Ekambi said.

Shares in European companies with a big exposure to emerging markets have been hammered recently, hurt by fears that sharp moves in local currencies could have a negative impact on their revenues.

UK lender Barclays (LSE: BARC.L - news) dropped 3.8 percent after saying it would axe up to 12,000 jobs this year even as it raised bonuses for investment bankers. That prompted fury among politicians and unions who said it had not learned the lessons of the financial crisis.

Shares in L'Oreal fell 3.2 percent after initially rising, on disappointment about the level of earnings boost from the group's plan to buy back 8 percent of its own shares from Nestle (VTX: NESN.VX - news) .

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