* FTSEurofirst 300 up 0.7 pct, reverses previous day's slide
* Euro STOXX 50 up 1 pct, moves back above 50-day moving average
* "Stars are aligned" for Veolia-Suez tie-up -Exane
By Blaise Robinson
PARIS, April 16 (Reuters) - European shares rose on Wednesday, reversing the previous session's slide as economic growth data from China came a touch above forecasts.
Shares in Tesco, the world's No.3 retailer, gained 1.7 percent, bouncing after a 15 percent slide in two months as traders said a fall in profits reported by the group was not as steep as some had feared.
"Tesco this morning was not quite as bad as expected," said Berkeley Futures associate director Richard Griffiths.
French utilities Veolia Environnement and Suez Environnement both surged around 3 percent, boosted by merger speculation.
At 1031 GMT, the pan-European FTSEurofirst 300 index was up 0.7 percent at 1,316.05 points, in a rebound mostly seen by traders as technical.
Earlier this month, the index hit a near six-year high, but the rally has been halted by worries over the crisis in Ukraine as well as concerns about the pace of Chinese growth.
Data showed on Wednesday China's economy grew at its slowest pace in 18 months in the first quarter, at 7.4 percent, though the figure was slightly stronger than the median forecast of 7.3 percent in a Reuters poll.
"The Chinese data is reassuring, but at the same time company results have been quite mixed, just look at ASML. Without good earnings it's going to be difficult to move higher," said Arnaud Scarpaci, fund manager at Montaigne Capital, in Paris.
"This is not an entry point on the market, but it's not necessarily time to cut positions either. We should have a better idea of the short-term trend following the U.S. data this afternoon."
Investors awaited a batch of U.S. macroeconomic figures on Wednesday, including housing starts and industrial output.
Shares in ASML, the world's biggest manufacturer of tools for semiconductor chip makers, fell 3.5 percent after it trimmed its first-half sales forecast, blaming slower second-quarter sales to some customers.
Credit Suisse lost 2.1 percent after first-quarter net profit fell by more than a third as revenue from bond trading tumbled, raising question marks over the bank's investment banking strategy.
Veolia Environnement and Suez Environnement featured among top gainers after Exane BNP Paribas analysts said in a note the "stars are aligned" for the French waste and water companies to revisit the idea of a merger.
"We see up to 60 percent valuation upside from synergies in a bull scenario, while leverage should be reduced sharply, providing scope for further consolidation and/or improved shareholder remuneration," the analysts wrote.
Around Europe, Britain's FTSE 100 index was up 0.3 percent, Germany's DAX up 0.8 percent and France's CAC 40 up 0.8 percent.
The euro zone's blue-chip Euro STOXX 50 index was up 1 percent at 3,120.69 points, moving back above its 50-day moving average, sending a positive technical signal.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (additional reporting by Sudip Kar-Gupta in London; Editing by John Stonestreet)