* First-quarter underlying sales decline 4 percent
* Says Europe most affected by downturn
* Positive signs from U.S. and emerging markets
* Shares up 2.2 percent; CAC 40 down 1.5 percent
(Rewrites with CEO comments, details, analyst comment)
By Lionel Laurent
PARIS, Oct 22 (Reuters) - French spirits group Pernod Ricard signalled early signs of upturn in some markets on Thursday and beat forecasts with a 4 percent fall in first-quarter underlying sales, helping to boost its shares.
The sales decline from the maker of Absolut vodka and Chivas Regal whisky beat a Reuters forecast for a 4.7 percent decline for its July-September quarter and also rival Diageo's 6 percent dip for the same period.
The world's second largest spirits group by volume pointed to some signs of recovery in the duty free market and in the United States, and buoyant growth in most emerging markets particularly China and India, but added that Europe remained difficult.
Pernod shares were 2.2 percent higher at 0945 GMT, one of only three risers on the broader CAC 40 index, which was down 1.5 percent, while shares in Smirnoff vodka and Johnnie Walker whisky group Diageo were off 1.1 percent at 971 pence.
"Recovery will be slow but has started. The strength of economic growth expected for Asia suggests that this region should be the first to provide signs of recovery in spirits demand ... Recovery elsewhere will be much slower," said analyst Philip Morrisey at brokers Citi.
The Paris-based group said it will wait until its annual general meeting on Nov. 2 to give a profit target, after Diageo said it looked for low single-digit percentage underlying growth in operating profits for its financial year to June 2010.
Overall group quarterly revenue fell 6.3 percent to 1.646 billion euros ($2.46 billion), in line with the average forecast in a Reuters analyst poll of 1.644 billion.
Pernod's spirits brands held up better than expected with quarterly sales down 2 percent helped by rises in Martell cognac and Havana Club rum. Wine and champagne sales fell 13 percent with Perrier-Jouet plunging 38 percent.
Chief Executive Pierre Pringuet told Reuters that wholesale distributors in the U.S. were "broadly confident" on the remainder of 2009, though they were delaying placing orders, and sales to retailers were positive for the first time since 2008.
He also said Absolut vodka would benefit from a second wave of advertising. "I want Absolut to grow in the U.S. this year."
He added the group's first-quarter performance "strengthens our confidence for the current financial year and our determination to increase advertising and promotion investment in our strategic brands".
Pernod said Europe, which accounts for nearly a third of group revenue, saw a underlying sales decline 11 percent and "remains the region most affected" by the economic downturn.
"Europe is the problem area while Americas and Asia Pacific are better than anticipated," said Gerard Rijk, an analyst with ING in Amsterdam. ($1=0.6697 euros) (Additional reporting by Noelle Mennella; Editing by Mike Nesbit and Jon Loades-Carter)