* FTSEurofirst 300 up 0.7 pct
* Traders cite oversold levels, lack of liquidity
* Sainsbury’s gains after reporting sales figures
* Tech shares fall as Cap Gemini and AMS slip (Adds comments)
By Atul Prakash and Lionel Laurent
LONDON, June 10 (Reuters) - European shares snapped a six-day losing streak on Wednesday, with German equities rebounding from their lowest level since February, as traders said the recent sell-off had gone too far.
Stocks have taken a hit from recent wild swings in fixed-income markets. German bund yields rose above 1 percent on Wednesday for the first time since September, just months after the European Central Bank began a bond-buying plan to revive growth in the euro zone economy.
The FTSEurofirst 300 index was up 0.7 percent at 1029 GMT, with all industry sectors but one in positive territory, as traders pointed to a still-favourable economic and earnings backdrop for equities despite the recent sell-off.
“Equity investors have overreacted in the past sessions and the market has become ‘oversold’,” said Christian Stocker, strategist at Unicredit in Munich. “In the longer term, equities will stay attractive as companies’ earnings outlook is improving and the European economy is gradually recovering.”
The relative strength index (RSI) for the FTSEurofirst 300 index was hovering close to 30 -- a technically “oversold” condition that often results in a bounce back.
The German DAX index was up 0.8 percent but remains down 10 percent from April highs.
“The correction in the DAX was so strong that at some point buyers were poised to come in ... Liquidity is not good, so it doesn’t take a lot of buy interest to move the market this way,” said Claus Mose, a Luxembourg-based trader at Sparinvest.
British supermarket Sainsbury’s led the market higher, up 5 percent after reporting sales figures in line with the consensus forecast.
“There are some signs that future progress may be possible in non-food areas such as clothing, general merchandising and financial services,” said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
Shares in Asian-focused bank Standard Chartered rose 4.2 percent, with traders saying one reason for the rise was the possibility that Finance Minister George Osborne might tweak Britain’s bank levy in a speech later on Wednesday.
The STOXX Europe 600 Technology index fell 0.1 percent, the biggest sectoral decliner, dragged down by a 0.6 percent fall in Cap Gemini after it raised 505.8 million euros ($570.7 million).
AMS slumped 22.2 percent following a report in Swiss newspaper Finanz und Wirtschaft that the sensor manufacturer had lost a key contract with Apple.
Among other movers, Weir Group shares dropped 2 percent after the Scottish industrial engineering company said the second quarter was proving to be very challenging for its oil & gas division. (Editing by Catherine Evans)