* Sika, St Gobain rise on earnings updates
* Shell flags $400 mln hurricane hit
* Luxury stocks among top boosts
(Updates to close)
By Sruthi Shankar and Susan Mathew
Oct 7 (Reuters) - European stocks marked their best showing
since July on Thursday, as easing oil and gas prices offered
relief to investors worried about runaway inflation, while
positive earnings updates added to the upbeat sentiment.
The pan-European STOXX 600 index rose 1.6% to
reverse weekly losses, with buying seen across all sectors. The
energy sector gained the least, up 0.2%.
Stock market volatility has spiked in recent weeks on
concerns about soaring energy prices spurring inflation and
interest rates, debt problems at property developer China
Evergrande and risks from tighter monetary policies.
However, oil prices dropped for a second session after an
unexpected rise in U.S. crude stocks, and European gas futures
fell back from record highs as Russian President
Vladimir Putin said Russia would boost gas supplies to Europe
amid an energy crunch.
But strategists at UBS warned Russia's supplies may not have
a lasting impact in taming prices.
"Russian gas exports to Europe are already running at
elevated levels, and we think it's difficult for Russia to
accelerate its shipments further in time for the European winter
season," UBS said.
The auto and parts sector jumped 3.2% for its best
day in three months.
The automakers-heavy German DAX index logged its
best session since May, up 1.9%, shrugging off data that showed
the country's industrial output in August dropped the most since
April last year.
Also brightening the mood were a reprieve on the U.S. debt
ceiling front, after U.S. Senate leaders agreed to extend the
borrowing limit into December, and fewer than anticipated
jobless claims in the country were recorded.
Sika rose 3% after the Swiss construction chemicals
maker said it could overcome rising raw material costs and
supply chain restrictions to increase its sales and profit
margins this year.
A similar tone from French construction materials company St
Gobain and a stock buyback announcement lifted its
shares 4.2%.
With third-quarter earnings set to kick off, analysts expect
a slowdown in profit growth as a post-pandemic rebound
normalises. Profits for STOXX 600 companies are seen rising
45.6%, compared with a 152.6% surge in the second-quarter,
according to Refinitiv IBES data.
French luxury goods maker Hermes jumped 3.7% after
HSBC upgraded the stock to "hold", while peers LVMH,
Richemont and Kering all rose about 2%.
French car parts maker Valeo climbed 5.9% after a
Citigroup upgrade.
Shares of oil major Shell recovered after it warned
of a $400 million hit to third-quarter earnings from damages
caused by Hurricane Ida.
(Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru;
Editing by Subhranshu Sahu, Rashmi Aich and Steve Orlofsky)
