WASHINGTON, Nov 9 (Reuters) - U.S. import prices rose more than expected in October but price hikes for imported oil slowed, pointing to only modest inflation pressures.

  Import prices climbed 0.5 percent last month, the Labor Department said on Friday.

  Driving the overall gain, the cost of petroleum imports increased 1.3 percent during the month. America imports much of the fuel it consumes, and higher prices at the pump threaten to hurt consumers' pocket books.

  But the increase in the cost of imported oil was well below the 4.7 percent gain in September and the 6.2 percent increase in August.

  Analysts had expected overall import prices would be flat.

  U.S. stock index futures dipped and were on track to post their worst week in five months as the euro zone crisis was seen hitting France and Germany and investors fretted over the possibility the United States could raise taxes and cut government spending in 2013. Prices for U.S. Treasuries rose.

  Still, there were signs that foreign suppliers of goods and services had a little more leverage to raise prices last month.

  Non-petroleum import prices rose 0.3 percent in October, the biggest gain since March. Prices for imported consumer goods other than cars rose 0.2 percent.

  The U.S. economy has shown some signs of perking up in recent months, with consumers spending more readily and housing construction picking up.

  Prices for imports from Canada rose 0.5 percent, while those from Mexico gained 0.4 percent. Prices from China, however, dropped 0.3 percent. The three countries are America's biggest trading partners.

  Despite stronger consumer spending, factory output in the United States has looked relatively weak, with businesses investing less and exporters troubled by the European debt crisis and the cooling global economy.

  In October, export prices were unchanged, the Labor Department said.

WARSAW (Reuters) - Polish Prime Minister Donald Tusk said on Friday that a veto of the European Union's proposed long-term budget by one or more member states was a possibility, but should be used only as a last resort.

  Tusk said that if a veto was exercised, Poland, the biggest net recipient of EU funds, would seek to find common ground with countries that are net contributors.

  " In case of plan B, a coalition with large net contributors will be important to ensure that the provisional budget is also applied to Poland," Tusk said in a speech to the parliament.

  EU negotiators remain hopeful of a deal later this month on the bloc's next long-term budget, despite differences of opinion between Germany, Britain and other major financial contributors.

  (Reporting by Pawel Sobczak Editing by Catherine Evans)

By Aung Hla Tun and Matt Spetalnick

  YANGON/WASHINGTON (Reuters) - President Barack Obama will become the first U.S. leader to visit Myanmar this month, the strongest international endorsement of the fragile democratic transition in the Southeast Asian country after half a century of military rule.

  Obama will travel to Myanmar during a November 17-20 tour of Southeast Asia that will also take in Thailand and Cambodia, the White House said on Thursday, confirming his first international trip since he won a second term in Tuesday's election.

  He is going ahead with the trip despite recent sectarian violence in western Myanmar that has drawn concern from the United States and European Union.

  U.N. human rights investigators have criticised the quasi-civilian government's handling of the strife between Buddhists and minority Muslims, and some Myanmar exiles see Obama's trip as premature before political reforms have been consolidated.

  The visit to Myanmar, the first by a sitting U.S. president, will give Obama a chance to meet President Thein Sein and opposition leader Aung San Suu Kyi to encourage the " ongoing democratic transition" , White House spokesman Jay Carney said.

  Suu Kyi spent years in detention under the military as the figurehead of the movement for democracy. She was elected to parliament in April, when her National League for Democracy (NLD) ran in by-elections after boycotting a 2010 poll.

  Obama will be in Myanmar on November 19, according to a senior government source in Yangon, where people expressed delight.

  " I believe it is a clear sign of improved ties between the two countries and I am very glad that our NLD party played an important role in working for the emergence of this situation," said NLD executive committee member Han Tha Myint.

  Myint Soe, vice-chairman of the Federation of Chambers of Commerce and Industry, said the historic visit showed Myanmar had now been admitted into the international community.

  " It's good for President Obama to see things with his own eyes," he said. " I would like to request him to keep encouraging the democratisation process in our country by helping to promote the socioeconomic standards of the people."

  Obama's presence in Myanmar, also known as Burma, will highlight what his administration sees as a first-term foreign policy achievement and a development that could help counter China's influence in a strategically important region.

  Washington takes some credit for a carrot-and-stick approach that pushed Myanmar's long-ruling generals toward democratic change and led to Thein Sein taking office as a reformist president in 2011.

  But Obama also risks criticism for rewarding the new government too soon, especially after security forces failed to prevent bloody ethnic violence in the west of the country.

  At least 89 people were killed in the recent clashes between Buddhist Rakhines and minority Muslim Rohingyas. Many thousands more have been displaced by the violence.

  The U.S. Campaign for Burma, an exile group, said Obama's trip could " undermine the democracy activists and ethnic minorities" , but added that if the president was intent on going, he should broaden his agenda to include meetings with the still-powerful military and an address to parliament.

  A senior administration official said Obama, who will also speak to civil society groups, was " acutely aware" of concerns about human rights, ethnic violence and political prisoners in Myanmar and would address those issues during his visit.

  SANCTIONS EASED

  The United States eased sanctions on Myanmar this year in recognition of the political and economic change under way, and many U.S. companies are looking at starting operations in the country located between China and India, with its abundant resources and low-cost labour.

  In November 2011, Hillary Clinton became the first U.S. secretary of state to visit Myanmar in more than 50 years.

  Obama has sought to consolidate ties and reinforce U.S. influence across Asia in what has been dubbed a policy " pivot" toward the region as wars in Iraq and Afghanistan wind down.

  Myanmar grew close to China during decades of isolation, reinforced by Western sanctions over its poor human rights record, but is now seeking to expand relations with the West.

  Obama met Suu Kyi, a fellow Nobel Peace Prize laureate, on her visit to the United States in September. Thein Sein was also in the United States to attend the opening of the U.N. General Assembly in New York but the two leaders did not meet.

  U.S. Democratic Representative Joe Crowley, who is active on Myanmar issues, said Obama's trip could be " the most significant step" in support of democracy there.

  But he said: " There is still much more to be done. Too many political prisoners remain locked up, ethnic violence must be stopped, and not all necessary political reforms have been put in place."

  Obama will be in Southeast Asia to attend meetings in Cambodia centred on an annual summit of the 10-country Association of Southeast Asian Nations, which is usually extended to take in leaders of partner countries.

  Preliminary details for this year show the event will run from November 15 to November 20. The Cambodian government has said Obama will be in the capital, Phnom Penh, on November 18. The White House has yet to release a detailed itinerary.

  The heads of government of China, Japan, Russia and other countries are also expected in Cambodia for the meetings.

  (Writing by Matt Spetalnick and Alan Raybould Editing by Peter Cooney and Robert Birsel)

* Bunds to hold recent gains as Greece aid saga drags on

  * Looming U.S. fiscal cliff to support Bunds in medium term

  By William James

  LONDON, Nov 9 (Reuters) - Low-risk German bonds rose on Friday with demand solid after sizeable gains this week spurred by worries over Greece's debt problems and the prospect of growth-crushing spending cuts in the United States.

  Greece will vote to approve the country's 2013 budget on Sunday, the next big step towards unlocking access to urgently-needed international aid after Wednesday's tight vote in favour of a 13.5 billion euro austerity package.

  However, on Thursday the German finance minister said it may be too early to decide next week on granting Greece further aid, dashing the hopes of those who expected the aid to be approved at a meeting of euro zone finance ministers on Monday.

  Bund futures rose 10 ticks on the day to 143.08, adding to gains of more than a point since last Friday's close, although market participants cautioned that after such a good run, the rally may not extend much further.

  " Bunds have had a good run this week and obviously the situation in Greece and Spain is still out there, but I get the feeling a lot of that is in the price now," a trader said, adding that he was looking for a break to around 142.80.

  Traders also highlighted the December contract's Aug. 2 high of 143.35 as a resistance level which may curb rising prices.

  Debt issued by Spain also came under modest pressure, with traders citing persistent uncertainty over when and if the country would seek a bailout to resolve its debt problems.

  Spanish 10-year yields were 2 basis points higher at 5.89 percent.

  HEADED FOR THE CLIFF

  The safety bid has been fuelled in part by the re-election of Barack Obama as U.S. president and the risk that politicians will be unable to negotiate a way around $600 billion in spending cuts and tax hikes which could extinguish growth in the world's largest economy.

  Market participants said the likelihood of protracted wrangling should maintain demand for less risky, " core" bonds as a shelter from the uncertainty.

  " Looking at the next few weeks we would expect both Bunds and U.S. Treasuries to trade supported at about current levels," said Rainer Guntermann, strategist at Commerzbank in Frankfurt.

  " Obviously the fiscal cliff is the big issue and over here in Europe we have economic weakness coming through in the core countries."

  In recent days, both the European Commission and the European Central Bank have acknowledged a worsening outlook for the euro zone's struggling economy -- supporting bonds and deterring investment in riskier assets such as stocks.

* Oct industrial output +9.6 pct y/y vs +9.4 pct f'cast

  * Oct retail sales +14.5 pct y/y vs f'cast +14.0 pct

  * Jan-Oct fixed asset investment +20.7 pct y/y vs f'cast +20.6 pct

  * Oct CPI +1.7 pct y/y vs f'cast unchgd from Sept +1.9 pct

  * PPI -2.8 pct vs f'cast -2.7 pct and -3.6 pct in Sept

  By Nick Edwards and Kevin Yao

  BEIJING, Nov 9 (Reuters) - China's economy strode further along the road of recovery from its slowest growth in three years, data for October showed on Friday, as infrastructure investment accelerated and output from the country's factories ran at its fastest in five months.

  The uptick in key economic activity indicators last month, after signs of a rebound emerged in September data, cemented the view of many analysts and investors that China's rebound was now gathering momentum thanks to a raft of pro-growth policies rolled out by the government in recent months.

  " It's pretty clear that there is no hard landing risk, that the economy will improve in the fourth quarter and we're going to see 9 percent year-on-year growth in the first half of next year," Dariusz Kowalczyk, senior economist and strategist for non-Japan Asia, Credit Agricole CIB, told Reuters.

  That's a bold call on growth after seven successive quarters of slowing activity dragged the annual rate of economic expansion down to 7.4 percent in Q3 - its lowest since early 2009 - leaving the world's second biggest economy on track to mark its most sluggish year since 1999.

  The benchmark Reuters poll taken in October after Q3 GDP data forecasts first half growth in 2013 of 7.8 percent, but Kowalczyk is not alone in being above consensus - and being further convinced that October's numbers are a turning point.

  " The key question for investors is whether China's economic growth has truly bottomed out," Ting Lu, chief China economist at Bank of America/Merrill Lynch in Hong Kong, wrote in a note to clients.

  " Based on October data, especially the 9.6 percent industrial production growth reading, the answer is firmly 'yes'," said Lu, who expects China's GDP growth to run at an 8.3 percent pace in the first half of 2013, picking up from a 7.8 percent rate in Q4.

  Risk assets were somewhat less emphatic in their response to numbers that showed upside surprises in industrial output, fixed asset investment - up 20.7 in the first 10 months of the year - and retail sales, up 14.5 percent in October on the year.

  While Asian currencies were broadly steady to firmer and Brent crude and base metals nudged higher, equities were subdued by worries about the risks from the so-called " fiscal cliff" in the United States and fresh concerns about sovereign debt problems in Europe.

  " Equities in China are highly correlated with the economic cycle in and I strongly believe that the economic cycle in China justifies higher valuations going forward," Kowalczyk said.

  BASE EFFECTS FLATTER

  Lu meanwhile cautioned that there is risk of a strong base effect flattering the H1 numbers next year, but points out that infrastructure investment has accelerated solidly since the government began fast-tracking major projects a few months ago, underpinning domestic economic activity.

  Lu says total planned investment in newly started projects, a leading indicator of FAI, accelerated to 35.2 percent year-on-year in October from 31.3 percent in September.

  Despite signs of strength, analysts broadly say that further gains depend largely on the government maintaining its commitment to pro-growth monetary and fiscal policies, even though few economists expect additional action in the near term.

  " I don't expect any easing in monetary policy until the end of this year because it would be unnecessary as the economy is recovering," Yao Wei, China economist at Societe Generale in Hong Kong, told Reuters.

  Beijing has been fine-tuning economic policy for a year to support growth, and analysts expect that programme to broadly remain in place after a new leadership of the ruling Communist Party is unveiled at a congress that began on Thursday.

  Outgoing party chief, President Hu Jintao - almost certain to be succeeded by Vice President Xi Jinping - said in a speech to the congress that China would stick to policies fostering sustainable, long-term economic development with the aim of doubling GDP over the 10 years to 2020.

  China has cut benchmark interest rates twice this year, lowered bank reserve ratios three times since late 2011 and made repeated, large-scale liquidity injections into the financial system to underpin slowing growth in the short-term.

  NAGGING DOWNSIDE RISKS

  Friday's data, key barometers of both domestic activity and output from China's export-oriented factory sector, offered further evidence that policy loosening had worked and had left the authorities with room to do more if necessary.

  Consumer inflation eased to its slowest pace in nearly three years in October, with the 1.7 percent rise from a year ago slower than the 1.9 percent posted in September. Economists polled by Reuters had expected inflation to hold steady.

  Factory-gate prices in October fell 2.8 percent from a year earlier, a touch faster than the forecast fall of 2.7 percent but easing from September's 3.6 percent annual drop, which bodes well for a corporate sector struggling to cope with falling profits due to producer price deflation.

  The nagging downside for company earnings of falling producer prices and industrial production still firmly below its double-digit trend, despite the latest uptick, are reasons why Alistair Thornton, an economist with IHS Global Insight in Beijing, believes it is too early to declare that growth has definitively stabilised.

  " The bottom line is that the economy remains very sluggish," he wrote in a note to clients. " Over the next couple of months, the economy will most likely continue to bounce off the bottom, although the balance of economic forces is shifting more to the upside than the downside."

* HSI down 0.9 pct, falls 3.3 percent on week

  * China banks, energy shares hit by profit-taking after rally

  * CSI300 down 2.9 percent, Shanghai Comp down 2.3 pct on week

  * Railway stocks up again in China on investment spending hopes

  By Vikram Subhedar

  Nov 9, (Reuters) - Hong Kong shares eased further from their 2012 highs as weak overseas markets spurred more profit-taking, particularly in China-focused shares, dragging the benchmark to its worst weekly performance since mid-July.

  The Hang Seng Index fell 0.9 percent to 21,384.4, its worst week in four months, while the China Enterprises Index was down 0.7 percent, with recent outperformers such as banking and energy shares the biggest drags.

  Both indices fell more than 3 percent for the week.

  On the mainland, the CSI300 of top Shanghai and Shenzhen listings and the Shanghai Composite both edged down slightly, but pared earlier losses on the back of strength in railway stocks.

  On the week, the two indices were down 2.9 percent and 2.3 percent, respectively.

  China's annual consumer inflation in October eased to its slowest pace in nearly three years, official data showed on Friday, giving policymakers room to further loosen monetary policy to support growth if needed. Stock markets were little changed following the data.

  " It's one of these situations where capital flows are driving prices and there's a lot of rotation going on," said Chrisian Keilland, head of trading at BTIG in Hong Kong.

  " You see people unloading winners and looking into ideas that have been ignored for a while," said Keilland, adding that while losses on the S& P 500 in the United States were affecting markets, there were few signs of any major selling pressure.

  China Construction Bank and oil major Sinopec contributed the most to weakness on the China Enterprises Index with losses of 1 percent and 1.6 percent, respectively.

  PetroChina fell 1 percent.

  Encouraged by signs of stabilising growth in China, investors have flocked to growth-sensitive sectors and banking shares that had lagged the broader market over the first three quarters of the year.

  But a 3.5 percent drop over the past two days for the S& P 500 which could be headed for its worst weekly performance in a year and renewed euro-zone growth worries has prompted some investors to lock in sectors that drove last month's rally.

  Bucking the weaker trend on the day, Lenovo Group added 5.8 percent following second-quarter results to close at its highest since June 20 this year. Telecom hardware maker ZTE rose 1.9 percent.

  Warren Buffet-backed BYD Co rose 7.6 percent.

  RAILWAYS JUMP IN CHINA

  Hopes of more spending on rail infrastructure drove up shares of rail equipment makers in Shanghai.

  CSR Corp was up 4.2 percent and among the top gainers on the CSI300 index. China Railway Group rose 3.3 percent and China Railway Construction was up 3.5 percent.

  According to Haitong Securities, China's Ministry of Railways is estimated to spend up to 160 billion yuan ($25.63 billion) in the last two months of 2012 on infrastructure spending.

  Oil companies were weak on mainland bourses too, with PetroChina off 0.3 percent and the top drag on the CSI300.

* MSCI world index flat, on course for over two pct weekly loss

  * European shares extend losses to third day

  * Euro steadies near 2-month low vs dollar

  * Gold firms, set for biggest weekly gain since end-January

  LONDON, Nov 9 (Reuters) - World share markets were on course for their worst weekly performance since June on Friday as concerns over the United States fiscal cliff and the outlook for Europe hit sentiment.

  But better-than-expected Chinese economic data for October, pointing to a modest rebound in the world's second largest economy, helped ease concerns over global growth, keeping market moves within tight ranges.

  The MSCI world equity index was flat at around 323.6 points but has lost just over two percent this week and is on track for its worst performance since early June.

  European shares extended their losses into a third day, partly due to worries over whether Greece will secure a deal to unlock access to urgently needed international aid.

  The FTSE Eurofirst index of top European shares fell 0.1 percent to 1096.51 in early trading. London's FTSE 100 , Paris's CAC-40 and Frankfurt's DAX barely changed at the open.

  Greece votes to approve the country's 2013 budget on Sunday, the next big step towards allowing bailout money to flow again so it can avoiding defaulting on its debt.

  " We still have the situation in Greece, the volatility indexes are showing that investors are not too worried at the moment but that can change quickly so politicians need to act quickly," said Emile Cardon, a market economist at Rabobank.

  The euro steadied at around $1.2750 to the dollar, just above a two-month low of $1.2717 hit on Thursday after the European Central Bank kept rates on hold and its president, Mario Draghi, sounded downbeat on the euro zone economy.

  The dollar was down 0.1 percent after hitting a two-month high against a basket of major currencies of 81.001 on Thursday. Rising demand on the back of the looming U.S. fiscal crisis underpinned the greenback, seen as a safe haven.

  Since the U.S. elections on Tuesday investors have become worried that Washington could struggle to find a compromise to cut the budget deficit before nearly $600 billion worth of spending cuts and tax increases kick in early 2013.

  Markets are also eyeing the debt ceiling, which needs to be raised to avoid a government shutdown.

  Gold rose to a three-week high of $1,737.60 an ounce on Friday, and is on track for its first weekly gain in a month as the fiscal worries boosted the appeal of the precious metal.

  Analysts say the fiscal cliff could derail the U.S. economy, which had recently defied a general trend in other parts of the world by showing signs of a modest recovery, and a U.S. recession could drag the global economy down further.

  Those concerns ease somewhat after Chinese data showed industrial output and retail sales for October slightly exceeded expectations, while annual October consumer inflation eased to its slowest pace in nearly three years, giving policymakers scope to further loosen monetary policy if needed.

  " But given the uncertainties in the outside world, we expect the recovery momentum to be limited and the full-year industrial output is likely to be around 10 percent for this year," said Iang Chao, analyst at Guotai Junan Securities in Shanghai.

  The slightly better outlook for China left U.S. crude up 34 cents to $85.43 a barrel and Brent rose 13 cents to $107.38.

(Corrects to say China is the world's biggest energy consumer, not 2nd biggest, in 14th paragraph)

  * ECB warns Greece that help is nearing an end

  * Tensions in Iran, Syria escalate

  * Snowstorm in U.S. northeast triggers gasoline rationing

  * Coming up: OPEC monthly report for October, time unknown

  By Ramya Venugopal

  SINGAPORE, Nov 9 (Reuters) - Brent crude futures steadied above $107 on Friday and were poised to end the week with a marginal gain, their first in four, but prices are likely to remain under pressure as the outlook for the global economy, and fuel demand, remains weak.

  Oil prices went on a rollercoaster ride this week. U.S. President Barack Obama's re-election ended weeks of political uncertainty and lifted prices, but a possible U.S. fiscal crisis and more grim news about Europe's economic woes weakened futures.

  Supply worries caused by tension in the Middle East over Iran's nuclear programme and rising violence in Syria, however, are likely to continue to lend support to prices.

  " Politics is going to take centre-stage as far as commodity markets are concerned," said Natalie Rampono, a commodity strategist at ANZ.

  " At the same time, Syria and Iran will provide a little bit of support, so we expect choppy and sideways trading next week."

  Front-month Brent futures were trading 13 cents higher at 107.38 per barrel by 0500 GMT, posting a 1.7 percent gain on the week so far. It rose as much as 3 percent and dropped as far as 4 percent on some days this week.

  U.S. crude added 34 cents to $85.43 per barrel, after posting gains of 4 percent and 5 percent during some of the week's sessions. It is up 0.7 percent so far this week.

  A snowstorm in the northeastern United States, and gasoline rationing, are also likely to curtail demand and pressure prices further.

  RATHER BLEAK

  Greece remains the focus of the European crisis, with European Central Bank chairman Mario Draghi saying that the bank was done helping the near-bankrupt nation with its problems.

  Draghi also gave a rather bleak outlook for the overall euro zone economy, saying it showed little sign of recovering before the year-end, despite easing financial market conditions.

  In the United States, investors are now focused on the looming " fiscal cliff" - a $600 billion package of spending cuts and tax measures which may pull the economy into deep recession.

  The International Monetary Fund on Thursday urged the U.S to quickly reach an agreement on a permanent fix to avoid the fiscal cliff, saying a stop-gap solution could be harmful to the global economy.

  " Financial markets are finding it difficult to adopt a 'business as usual approach' in the wake of the U.S. election, with Wall Street fixated by fiscal cliff ramifications," Tim Waterer, a senior trader at CMC Markets, wrote in a note.

  Oil prices may get a boost next week after China announces October trade data on Saturday which is expected to show a slight pickup in imports, pointing to a recovery in domestic demand in the wor ld's biggest energy consumer.

  China's consumer inflation eased to its slowest in nearly three years in October, giving policymakers scope to further loosen monetary policy, data showed on Friday.

  " (That was) one positive development amid all the doom and gloom from the U.S. and Europe which is putting markets on a tentative footing," Waterer said.

  Tension between Iran and the West over its nuclear programme also appeared to take a turn for the worse after the Pentagon said on Thursday that Iranian warplanes fired at an unarmed U.S. drone in international airspace last week but did not hit the aircraft.

  In Syria, rebels are fighting a 19-month battle against government forces, and skirmishes along the country's borders are escalating tensions with its neighbours, especially Turkey.

  On Thursday, President Bashar al-Assad said he would " live and die" in Syria and warned that any Western invasion to topple him would have catastrophic consequences for the Middle East. (Editing by Miral Fahmy and Joseph Radford)

Nov 9 (Reuters) - Hong Kong shares eased further from their 2012 highs on Friday, as weak overseas markets spurred profit-taking in China-focused shares, dragging the benchmark to its worst weekly performance since mid-July.

  The Hang Seng index fell 0.9 percent to 21,384.4 while the China Enterprises index fell 0.7 percent, with recent outperformers, such as banking and energy shares, the biggest drags. Both indices lost more than 3 percent this week.

  On the mainland, the CSI300 of top Shanghai and Shenzhen listings fell 0.2 percent while the Shanghai Composite closed down 0.1 percent. The indices lost 2.9 percent and 2.3 percent on the week respectively.

  HIGHLIGHTS:

  * Chinese banking and energy shares, the best performing sectors in October, were hit by more profit-taking and were the biggest drags on the Hang Seng. China Construction Bank and Petrochina fell 1 percent while Sinopec dropped 1.6 percent.

  * Shares of Chow Tai Fook Jewellery Group Ltd fell nearly 5.6 percent after China's top jewellery retailer warned of lower profit margins due to gold hedging activities.

  * Bucking the weaker trend, Lenovo Group added 5.8 percent and neared a three-month high following second-quarter results. Telecom hardware maker ZTE rose 1.9 percent.

LONDON, Nov 9 (Reuters) - European shares edged off one-week lows on Friday, helped by fresh forecast-beating data from China and a solid gain for Danish drugmaker Novo Nordisk after one of its products gained U.S. approval.

  Sentiment remained fragile, however, given persistent concerns over the near-term U.S. fiscal outlook and the funding needs of austerity hit Greece.

  At 0818 GMT, the FTSEurofirst 300 index of top European shares was up 0.1 percent at 1,099.30 points, after falling 0.2 percent in the previous session.

  China's annual industrial output growth rose more than expected in October and fixed asset investment ticked higher, further raising expectations of a modest rebound in the last quarter.

  " The pace of growth of 8 or 9 percent that we saw over the last few years will probably not return, but that's not what is in the price. What's in the price is slowing economic growth, so if we see some resilience in the Chinese economy then that will be rewarded by higher prices," Gerard Lane, equity strategist at Shore Capital, said.

  " You would want to be long on China-exposed companies and on the emerging market-orientated stocks such as luxury goods. That would provide cyclical risks in portfolios, which should otherwise be very defensive because elsewhere in the world things are slowing, if not contracting."

  Leading gainers across the FTSEurofirst 300 was Novo Nordisk, up more than 10 percent after an advisory panel to the U.S. Food and Drug Administration late on Thursday voted to recommend approval of its long-acting insulin degludec.