* FTSEurofirst 300 closes flat after sharp losses
* Market recovers after Citi results, U.S. stocks rally
* German investor morale lowest in almost 2 years
By Atul Prakash
LONDON, Oct 14 (Reuters) - Europe’s benchmark share index recovered late on Tuesday after hitting an eight-month low earlier in the day on global growth concerns, with Citigroup results and a rally in U.S. stocks cheering some investors.
Citigroup reported a better-than-expected 13 percent rise in adjusted third-quarter net profit and said it was returning to an earlier structure of concentrating on business clients by pruning its consumer businesses worldwide.
The pan-European FTSEurofirst 300 index ended flat at 1,293.47 points after earlier falling more than 1 percent to 1,274.87, the lowest since February. U.S. stocks were up 0.8 to 1.5 percent by 1611 GMT.
”Equity markets have fallen quite a lot from their peaks in the last couple of weeks. This creates some scope for a rebound into the fourth quarter, which would also be helped if the earnings season turns out to be not too bad,“ Gerhard Schwarz, head of equity strategy at Baader Bank, said.”
The index has lost about 9 percent since mid-September as equity markets worldwide worry about the outlook for global growth and the timing of a first U.S. interest rate hike after years when central banks have pumped out cheap money.
In Germany, think tank ZEW’s monthly survey of economic sentiment tumbled for a 10th straight month to -3.6, the weakest since November 2012, suggesting Europe’s largest economy was reeling from crises abroad and a weak euro zone.
“Investors are pricing in continued bad data prints across Europe. But a weaker euro, QE (quantitative easing) prospects and cheap valuation of blue-chip, export-led stocks in Europe might provide a base for a share rebound,” said Lorne Baring, managing director of B Capital Wealth Management.
Cyclical sectors were under pressure, with the STOXX Europe 600 Banking index still down 0.3 percent, after falling sharply earlier in the day, as investors awaited results this week from major U.S. financial companies such as Bank of America , Goldman Sachs and Morgan Stanley.
Luxury stocks were also vulnerable, with Burberry among the biggest losers in Europe, down 3.7 percent, after warning that market conditions were becoming more difficult. The warning hurt other luxury goods firms, with Louis Vuitton owner LVMH down 0.4 percent.
Smaller rival Mulberry tumbled 10 percent after saying full-year pre-tax profit would be significantly below expectations after a slump in first-half trading added to the disruption of a product overhaul.
Bucking the trend, shares in Iliad surged 9.8 percent in brisk volumes after the French low-cost telecoms operator dropped its bid to buy T-Mobile U.S. Inc.
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 Blaise Robinson in Paris; Editing by Hugh Lawson/Ruth Pitchford)