* FTSEurofirst 300 index rises 0.5 percent
* Automakers top gainers, up 1.3 percent
* French retailer Casino up on JP Morgan upgrade
By Atul Prakash
LONDON, April 9 (Reuters) - European shares rebounded on Wednesday, led by automakers, although caution ahead of the European earnings season could keep gains under check.
The STOXX Europe 600 Automobile and Auto Parts index rose 1.3 percent, making it the top sectoral gainer. Volkswagen rose 2.8 percent and Porsche 3.9 percent after Bernstein raised its ratings for the shares, traders said.
Bernstein lifted its ratings on both companies to "outperform" from "market perform." It also said Volkswagen had extensive exposure to a European market recovery.
Automakers helped the FTSEurofirst 300 index of top European shares to gain 0.5 percent to 1,339.71 points by 1037 GMT. The day before, it had fallen to its lowest level in more than a week.
"Overall, worldwide demand for automobiles is fairly good," said Philippe Gijsels, the head of research at BNP Paribas Fortis Global Markets. "Also, auto companies are in a much better shape now after cutting costs and becoming more efficient following very difficult circumstances in the past years.
"Going forward, investors' focus will be on the earnings season. At a time when valuations have become quite stretched, people will scrutinise company outlooks in the earnings reports for hints about the stock market's direction."
According to Thomson Reuters Datastream, the STOXX Europe 600 index trades at 14 times its 12-month forward earnings, against a 10-year average of 11.9 times.
Analysts said the stock market needed some catalysts to resume its rally and focus would be on European earnings, which will gather pace later this month.
Alcoa kicked off the U.S. earnings season by reporting a fall in first quarter adjusted profit late on Tuesday as aluminum prices dropped, but earnings came in ahead of analysts' expectations.
"We are cautiously optimistic about the first-quarter European reporting season and expect positive earnings growth in mid-single digit," said Ronny Claeys, a senior strategist at KBC Asset Management in Brussels. "We need some really positive news on earnings and economic growth to start the market going again. Until then, equities could struggle to move strongly higher."
Investors were also cautious because stocks had become relatively expensive and because tension between Ukraine and Russia lingered on.
U.S. Secretary of State John Kerry accused Russian agents and special forces on Tuesday of stirring separatist unrest in eastern Ukraine, saying Moscow could be trying to prepare for military action as it had in Crimea.
Analysts said the market would focus on further data releases for hints about the market's near-term outlook. Wednesday's figures showed German exports fell more than expected in February and imports rose, narrowing the trade surplus in Europe's largest economy.
However, the market's longer-term outlook stayed positive.
"We continue to favour Europe, where economic activity is improving and the central bank is likely to ease. We are overweight Italy, Spain, France, Germany and Switzerland," HSBC said in a research note.
Among individual movers, French retailer Casino rose 4.9 percent, the biggest gainer on the FTSEurofirst 300 index, after JP Morgan raised its stance on the stock to "overweight" from "neutral" and raised its target price to 94 euros from 81 euros, traders said.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Editing by Larry King)