* FTSEurofirst 300 up 1 pct
* Euro STOXX 50 posts biggest 2-day gain in 5 months
* Euro zone debt woes, technicals suggest more downside to come
By Toni Vorobyova
LONDON, April 25 (Reuters) - European shares rose for a second day on Wednesday, bolstered by a crop of strong earnings reports, but volatility remained high, with investors betting that economic weakness and the euro zone debt crisis would prompt a fresh down leg before too long.
Much better-than-expected profits from Apple chimed in with a string of more modest forecast beats in Europe, including from Swedbank and Peugeot.
The FTSEurofirst 300 closed up 1 percent at 1,042.55 points, further recovering from Monday's three-month low of 1,018.65 hit on concerns that political shifts in France and the Netherlands would make it even harder for the euro zone to come out of recession and help debt-ridden members like Spain.
"The majority of the bounce we've had is to do with Apple numbers," Andy Ash, head of sales at Monument Securities said.
"I think we will only be nudging up to test the resolve ... One can ignore things like Spain on a daily basis, but not for longer."
UK stocks underperformed, with the FTSE 100 up only 0.2 percent, after data showed Britain has slipped into recession.
In the absence of fresh bad news from the euro zone, the Euro STOXX 50 added 1.7 percent after a similar increase on Tuesday, making for its biggest two-day gain in five months but still leaving it flat on the year-to-date.
The relatively solid corporate earnings helped cyclical shares such as autos and high beta banks to lead the rebound after being among the worst hit during the month-long sell-off which started in mid-March.
Fiat Industrial topped the FTSEurofirst gainers board with a 7 percent rise after its agricultural equipment unit CNH Global said first quarter net income nearly doubled year-on-year.
Two-thirds of the companies in the Thomson Reuters Global Index which have reported first quarter results to-date, have beaten or met analysts' expectations, while earnings on aggregate are up 9 percent year-on-year, according to StarMine data.
"We are slightly bullish on equities," Reto Stiffler, a European equities fund manager at Swiss & Global Asset Management said.
"Globally, leading indicators point to higher growth in the next quarters and there is plenty of liquidity in the system. If we look at cyclical-adjusted price/earnings ratio (CAPE), European equities look cheap."
However he did not rule out that in the near term there could be scope for more lows and technical strategists said the European equity market had yet to hit its bottom.
Implied volatility on the Euro STOXX 50 index, seen as a crude gauge of investor risk aversion, edged only slightly lower, staying some 4.4 percent higher on the week in a signal that the market's mood remained cautious.
Keeping investors at bay was the prospect of the U.S. Federal Reserve's interest rate announcement after market close.
For a meaningful, long-term rally in equities, the Fed and the European Central Bank would need to signal that they will pump more liquidity into the system, said Stewart Richardson, chief investment officer at RMG, adding that they are unlikely to do so until at least the summer.
"They will keep all options open, ... they will say things are very data dependent," he said. "It could have a glow effect on equities, but not much."