* FTSEurofirst 300 up 0.03 pct Euro STOXX 50 up 0.19 pct
* Athens' ATG up 1.2 percent as banks rally after ECB test
* Commerzbank rallies as it returns to div, HSBC slips
* Electrolux down as U.S. rejects proposal on GE business
By Danilo Masoni
MILAN, Nov 2 (Reuters) - European shares reduced losses by mid morning on Monday, with Greece shares outperforming as investors welcomed the outcome of European Central Bank (ECB) stress tests on its four main banks.
The pan-European FTSEurofirst 300 index was up 0.03 percent, off opening lows reached as weak Chinese data sparked global growh concerns, while the euro zone's blue-chip Euro STOXX 50 index was up 0.19 percent.
Athens' ATG index rose 1.2 percent, lifted by gains of around 20 percent in Alpha Bank and Eurobank , while Piraeus Bank and National Bank of Greece were up more than 5 percent.
The ECB assessment found that the four banks have a collective capital shortfall of 14.4 billion euros, less than the 25 billion euro maximum earmarked for bank recapitalisation as part of the country's latest bailout programme.
"The Greek banking stress test results released over the weekend revealed that Greek banks are doing better than expected and consequently need less of a cash infusion than originally thought," Peregrine & Black sales trader Markus Huber said.
Huber said overall sentiment in European stocks remained positive amid expectations of higher share prices by the end of the year.
In an interview over the weekend, ECB chief Mario Draghi said the central bank was ready to do what it takes to keep its medium-term inflation target on course, with analysts widely expecting the bank to loosen policy further in December.
China's factory activity fell for an eighth straight month in October but at a slower pace as export orders flickered into life, a private survey showed on Monday, pointing to continued sluggishness in the world's No. 2 economy.
Commerzbank rose 4.5 percent after the German bank said it would pay a dividend for the first time since 2007 as its recovery gains ground.
HSBC fell 1.2 percent in spite of a better than expected 32 percent rise in pretax profit for the third quarter thanks to reduced costs.
Electrolux dropped 6.6 percent after the U.S. Justice Department rejected the Swedish appliance maker's offer to settle a fight over whether it would be allowed to buy General Electric's appliance business.
French carmaker Renault rose 2.2 percent. According to data published on Sunday, French car registrations rose 1 percent in October, with Renault recovering some lost ground while rival PSA Peugeot Citroen saw a fall.
Irish airline Ryanair Holdings fell 0.1 percent despite lifting its profit forecast. Ryanair said fuller planes would take profits to the upper end of its previously estimated range, although the company also stated that no more cash would be returned to shareholders this year.
Today's European research round-up (Reporting by Danilo Masoni; Editing by Sudip Kar-Gupta and Toby Chopra)