* FTSEurofirst rises but still set for weekly loss
* ARM among top losers after warnings from Apple suppliers (Adds details)
By Danilo Masoni
MILAN, Jan 8 (Reuters) - European shares recovered on Friday, helped by a stabilisation in Chinese stocks, although persistent worries about China left a major European stock index on track for its worst weekly loss since late August.
The pan-European FTSEurofirst 300 index was up 0.1 percent by the middle of the session, recovering from a 2.3 percent decline the day before. It was still down about 5 percent so far this week - its worst week since late August.
China’s major stock indices rose on Friday after regulators quit using a circuit breaker mechanism that had halted trading twice this week. The shutdowns were blamed for exacerbating the sell-offs they were intended to limit.
Some investors said China’s ability to manage its markets has nevertheless been damaged. A fall in the yuan also raised concerns about a slowdown in China, the world’s second-biggest economy.
Jonathan Stubbs, European equity strategist at Citigroup, said that although he expected European shares to rise this year, helped by signs of a European economic recovery and higher corporate profits, markets would remain volatile.
“We still expect equity returns to be driven by modest growth and some re-rating this year, but volatility is likely to remain near-term,” said Stubbs.
Carmakers, for whom China is a key overseas market, rose nearly 1 percent to outperform other sectors. However, Fiat Chrysler fell after SocGen downgraded it to “sell” and JP Morgan reduced its price target on Fiat.
Chipmakers ARM Holdings AMS and Dialog Semiconductor also fell, after warnings from the Apple suppliers Cirrus Logic and Qorvo.
Cirrus Logic and Qorvo on Thursday added to growing worries about slowing shipments of the iPhone 6S and 6S Plus by cutting their revenue estimates for the third quarter.
Today’s European research round-up (Additional reporting by Sudip Kar-Gupta; Editing by Larry King)