MILAN (Reuters) - European shares bounced back in morning trading on Friday but were set for their first weekly drop since March as worries over global trade talks, Italy's government and a slowing economy took their toll.

A bounce in auto stocks helped the pan-European STOXX 600 (STOXX) benchmark rise 0.4 percent by 0716 GMT after ending at an eight-day low on Thursday. The index was down 0.6 percent on the week.

Autos (SXAP) rose 0.7 percent after US President Donald Trump's threat to impose import tariffs drew strong criticism with U.S. business groups and members of his own party warning of damage to the industry and American interests.

Shares in German carmakers BMW (DE:BMWG), Daimler (DE:DAIGn) and Volkswagen (DE:VOWG) rose between 0.3 and 1.1 percent.

Biggest gainers on the STOXX were Pennon Group (L:PNN), up 6.1 percent, following its trading update, and SimCorp (CO:SIM), up 4.6 percent, after a price target upgrade.

GVC Holdings (L:GVC) rose 3.7 percent after the British gambling company forecast higher cost synergies from its 4 billion pound acquisition of Ladbrokes (LON:LCL) Coral.

 

Italy's FTSE MIB (FTMIB) hovered near 7-week lows, down 0.1 percent, as the prospect of a eurosceptic government prompted investors to pull money out of the country's equity funds.