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European shares rise as Italian govt crisis threat recedes

* FTSEurofirst 300 up 0.5 pct, Euro STOXX 50 up 1 pct

* Euro zone PMIs, easing tensions in Rome help shares

* Fidelity says Fed policy to offset U.S. shutdown damage

By Francesco Canepa

LONDON, Oct 1 (Reuters) - European shares rebounded on Tuesday as positive euro zone data and rising expectations that a government crisis in Italy will be allayed boosted euro zone banks and peripheral indices.

Gains were capped, however, by uncertainty over the impact of the partial U.S. government shutdown, which potentially put up to 1 million workers on unpaid leave.

At 1449 GMT, the euro zone's blue-chip Euro STOXX 50 index was up 1 percent at 2,922.12 points. The pan-European FTSEurofirst 300 index was up 0.5 percent at 1,253.11 points, steadying after it shed about 1.8 percent from a five-year high hit two weeks ago.

Italy's FTSE MIB rose 2.4 percent, recouping part of a 4 percent drop in the previous three sessions, as a prominent "dove" in Silvio Berlusconi's party said a majority of parliamentarians in the party want to back the government in a confidence vote on Wednesday.

Italy's Intesa Sanpaolo, a major holder of Italian sovereign debt, rallied 5.6 percent, leading a 2.4 percent rally in the STOXX 600 Euro zone banking index as bonds from southern European countries rebounded. Spain's Ibex added 1.5 percent.

Stocks were also boosted by data showing factory activity in the euro zone grew for the third month running in September and stronger demand enabled manufacturers to raise prices for the first time since mid-2012.

"At the moment the euro crisis is in remission because we've got some strong economic numbers," said Trevor Greetham, director of asset allocation at Fidelity Worldwide Investment, which manages assets worth 160.1 billion pounds ($259.27 billion).

"Even this Rome crisis is unlikely to cause major problems but somewhere out there the next time there's an economic slowdown we think Europe will see a very rapid increase in stress once more."

European stocks rose 2-1/2 times faster than their U.S. counterparts in the three months to the end of September, Datastream data showed, but Greetham expected this trend to reverse as further debt-cutting by euro zone governments and banks once again took its toll on growth.

By contrast, Greetham said the U.S. economy looked on a self-sustained recovery and a loose monetary policy by the Federal Reserve for longer was likely to make up for any damage from the government shutdown.

Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said uncertainty about the U.S. fiscal and debt position could cause fresh upsets in coming weeks but the picture remained positive.

"Longer term, the fundamentals for higher equity prices remain in place as the world economy is picking up and quite a lot of money sits by the sidelines ready to come in," Gijsels said.