(Updates futures prices, adds company news)
LONDON, Jan 5 (Reuters) - European shares were set to rebound on Tuesday following a recovery in commodities prices and some stabilisation in Chinese markets, a day after poor Chinese factory numbers triggered a sharp sell-off in local equities and hit world markets.
Futures for the Euro STOXX 50, Germany's DAX , Britain's FTSE and France's CAC rose 1.0 to 1.2 percent by 0755 GMT.
"Asian markets, led by China, appear to have found some stability overnight despite another volatile start to the trading day on Tuesday, which is providing a temporary boost to European futures ahead of the open," ONADA analyst Craig Erlam said in a note.
Chinese regulators leapt to support stock markets early on Tuesday, with the central bank pouring cash into the money market system and the securities regulator suggesting it might restrict share sales by major shareholders.
The securities regulator defended the functioning of the new "circuit breaker" policy that caused Chinese stock markets to suspend trade on Monday after markets fell 7 percent, triggering the mechanism on the very first day it came into effect. The CSI300 index of the largest listed companies in Shanghai and Shenzhen closed 0.3 percent higher on Tuesday.
Mining stocks will be in focus as prices of major industrial metals rose more than 1 percent after falling in the previous session on concerns about demand for raw materials in China, the world's biggest metals consumer.
The pan-European FTSEurofirst 300 index lost 2.5 percent on Monday, its biggest one-day drop since a 3.3 percent fall on Dec. 3, as weak Chinese data weighed on world stock markets. The euro zone's Euro STOXX 50 index fell 3.1 percent, while Germany's DAX slumped 4.3 percent.
The U.S. Justice Department on Monday filed a civil suit against Volkswagen AG for allegedly violating the Clean Air Act by installing illegal devices to impair emission control systems in 600,000 vehicles.
British clothing retailer Next said on Tuesday its sales performance in the run-up to Christmas was disappointing, blaming unusually warm weather in November and December, poor stock availability and increased online competition.
The group said it had received tentative offers from third parties to buy the travel company and its businesses. Kuoni said the offers were preliminary and it was evaluating the situation, with no certainty that an offer will be made.
The French cosmetics group said it had agreed to buy assets from U.S. company Raylon Corporation, which is owned by the Hafetz family and supplies U.S. hair salons with professional beauty products.
The broadcaster is to launch an international German-language channel to cater to up to 10 million Germans living abroad, an RTL executive is quoted as saying by Handelsblatt.
Microchip Technology Inc is planning to submit a binding offer for Atmel Corp by early next week, according to people familiar with the matter, challenging Atmel's planned merger with Dialog Semiconductor Plc.
French telecom operator Orange confirmed on Tuesday it was in renewed preliminary talks about a merger with domestic rival Bouygues Telecom.
Separately, Orange said it entered exclusive talks with Groupama to create Orange Bank, a 100 percent mobile bank, in a deal that could see Orange buy a 65 percent stake in Groupama Banque. The launch of Orange Bank is planned for the start of 2017 in France, followed by other European markets such as Spain or Belgium.
The motorhome and caravan company said first-quarter revenue rose 29 percent to 311.1 million euros.
Technicolor announced a agreement with Philips to merge part of their high dynamic range (HDR) business, including content creation tools, encoding and decoding software and implementation support.
The in vitro diagnostics company announced the purchase of privately held Belgian firm Applied Maths, which develops software for databasing, analysis and interpretation of complex biological data.
The building materials group said it bought Brazilian specialty tubing company SG Plasticos, based in the state of Sao Paulo.
Glenmark Pharmaceuticals Ltd said it had reached agreement with Roche/OSI regarding ongoing patent disputes relating to anti-cancer medicine Erlotinib Hydrochloride. The settlement ends patent litigation on the product and would have no material impact on the company. bit.ly/1R8tWGz
Britain's drug regulators have given the go-ahead for a British American Tobacco electronic-cigarette vaping device to be sold as a quit smoking medicine, the first such product to be given a drug licence in the UK.
Barclays Plc plans to shut its India equities business as part of the British bank's efforts to slash costs and boost profit, two sources with direct knowledge of the development said on Monday.
New car sales in Italy, Europe's fourth-largest car market, rose 18.65 percent in December from a year earlier to 109,395 vehicles, the transport ministry said on Monday. FCA's market share rose to 29.46 percent in December from 27.85 percent the previous month, Reuters calculations showed. (Reporting by Atul Prakash; Editing by Sudip Kar-Gupta)