European shares set for worst week since late August
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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. Continuación...