European shares took back the previous day's losses on Friday as China growth data proved better than had been feared although the overall mood among investors remained cautious as the second quarter earnings season crept into focus.

Worries the China figures, released overnight, would be worse than forecasts have been central to a shaky tone to stock markets this week and miners benefit more than most from any more hopeful signs from the world's biggest metals consumer.

The 7.6 percent growth was bang in line with analysts' forecasts, although traders said recent falls in the mining sector had reflected fears of a reading below 7 percent.

It looks like most had positioned themselves for worse, so ... it is a positive, one London-based trader said.

The FTSEurofirst 300 rose 6.62 points or 0.7 percent to 1035.44 by 1035 GMT, having shed 1 percent on Thursday. Gold miner Petropavlovsk and Kazahk miner ENRC were among the top gainers with 4.3 and 2.3 percent gains respectively.

China's growth, although something Europe and the U.S. can only dream of at the moment, was still the slowest since the January-March quarter of 2009 and the sixth consecutive quarter of slower growth, fuelling hopes of more moves to stimulate the world's second largest economy.

This supports our view that economic activity will bottom-out over the summer months followed by a moderate recovery thereafter when the bulk of the step-up in macro accommodation is felt, Nikolaus Keis, an economist at UniCredit Research, said.

But, in order to safeguard a soft landing and further reduce downside risk, the Chinese authorities will have to intensify their policy accommodation, he said.

EARNINGS

The FTSEurofirst remains stuck in its current range, between the 50 and 61.8 percent retracement (1,030 and 1,050, respectively) of a fall between March and June, as Europe's debt crisis weighs on shares and investors await a further catalyst, which could be corporate earnings.

We're waiting for the results season ... and that momentarily should focus attention back on the corporate sector and partially away from the political and macro picture, James Buckley, fund manager at Baring Asset Management, said.

Banks bucked the broader gains and the index overall trimmed its gains after U.S. bank JPMorgan published results confirming substantial losses in derivatives trading.

Of the 3 percent of the companies to have reported earnings in Europe so far this quarter 88 percent have either beaten or met expectations with a reported surprise of 23.4 percent. But expectations for the entire period are for earnings to contract by around 9 percent, according to Thomson Reuters Starmine data.

There's a feeling that companies may struggle to meet or beat expectations, Buckley said. But the market has been pretty morbid recently and certainly a results season that is no worse than feared may help keep markets around current levels.

He added that he was not taking huge sector bets in his portfolio and with low volumes and uncertainty he expected markets to muddle through the summer.

British credit information company Experian was among the fallers, down 2.9 percent after traders were disappointed by its first-quarter statement.

Italian banks such as Unicredit and Intesa Sanpaolo were down around 1 percent after Moody's surprised markets by cutting Italy's bond rating by two notches to Baa2 and warning it could cut it further.

There was some relief, however, that the cut did not hamper the latest Italian debt auction, which sold the planned amount of bonds at lower yields than a month ago.

Against the murky macro backdrop, Citi's equity analysts reduced slightly their risk exposure in its sector strategy given the recent market rally, which has seen the FTSEurofirst gain 8.9 percent since early June.

It has reduced autos to neutral from overweight and Retail to underweight from neutral, and upgraded telecoms to neutral from underweight as valuation and seasonal effects point towards a more positive outcome.