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Euro zone banks rebound after Tuesday's fall
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Delivery Hero surges after forecast lift
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Flutter Entertainment drags Irish stock index
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STOXX 600 up 0.4%
Aug 9 (Reuters) - European shares hit a one-week high on Wednesday on a boost from energy stocks and as Italian lenders rebounded from the previous session's sharp losses after the government eased its stance on the windfall tax on banks.
Euro zone banks gained 1.4% after a 3.5% slump a day earlier, as Italy's government announced late on Tuesday a cap on a windfall tax for the country's lenders. It clarified that the 40% windfall tax would not amount to more than 0.1% of their total assets.
Italian lenders such as Finecobank, Banco BPM and UniCredit added between 4.3% and 7.1%while the banks-heavy FTSE MIB index rose 0.4%.
"We've had some watering down of the policy from yesterday, and what it looks like is the impact should be less severe, but still a tax, nonetheless," said Ankit Gheedia, head of equity and derivatives strategy at BNP Paribas.
The pan-European STOXX 600 ended up 0.4%, with data showing China slipped into deflation also providing a boost to risk sentiment.
""Equity traders are looking through that disappointing news to think that maybe that brings us closer to getting some meaningful stimulus out of China." said Steve Sosnick, chief strategist at Interactive Brokers.
The oil and gas index advanced 2.3%, posting its best day in two months as oil prices hit their highest levels since April.
The focus will shift to U.S. inflation data due on Thursday, with investors looking to see whether the Federal Reserve will raise interest rates again this year.
Meanwhile, earnings for STOXX 600 companies are expected to have fallen 4.8% in the second quarter, according to Refinitiv IBES data, a clear improvement from the 8.2% drop estimated at the start of the earnings season.
Delivery Hero advanced 4.7% after the German online takeaway food company raised its full-year revenue outlook.
Hiscox dropped 6.0% after the Lloyd's of London insurer's weaker retail growth outlook overshadowed its profit jump in its first-half results.
Flutter Entertainment lost 4.4% after the world's largest online betting firm posted a 76% jump in half-year core profit but warned of a weaker Australian market outlook.
The stocks dragged the Irish stock index down 1.3%, making it the only decliner among European bourses. (Reporting by Shashwat Chauhan, Sruthi Shankar, Amruta Khandekar and Shristi Achar A in Bengaluru; Editing by Varun H K, Eileen Soreng and Paul Simao)
