Earnings season shows euro zone's gain, FTSE's pain

* Euro zone stocks set for double digit earnings growth in2015

* Forecasts for FTSE 100 earnings growth slashed

* Euro zone seen resilient despite pressure from fallingyuan

By Alistair Smout

LONDON, Aug 12 (Reuters) - Scratch beneath the surface ofEurope's bumper earnings season and you will find a yawningdivide between a resurgent euro zone, lifted by a domesticrecovery, and sputtering UK-listed companies hurt by thecommodities slump.

That gap may be exacerbated by the latest bout of marketnerves over China's economy, one of the main reasons for theslump in major commodities markets and share prices exposed tothat sector, after a foreign-exchange devaluation that hassparked fears of global currency wars.

While the eurozone is not immune to a China slowdown, withGerman exporters like Volkswagen or Siemens and French luxury goods group LVMH suffering a hit this week, London-listed blue-chips are moreexposed to the mining and energy sectors.

So while this year euro zone companies are projected to growearnings by 13.4 percent, FTSE 100 members are set to see theirsdecline by 11.5 percent

"It's euro zone within Europe that is strong, and anyweakness is in the FTSE 100," said Patrick Moonen, seniormulti-asset strategist at NN Investment Partners.

"We can say with a high degree of confidence that even withthe current events in currency markets, euro zone earnings cangrow in double digits in 2015."

CONTINENTAL DIVIDE

With most of the earnings season done, 71 percent of EuroSTOXX firms have beaten or met revenue expectations,fuelling a 13.7 percent rise in year-on-year earnings.

For each of the last five years, forecasts of double digitsearnings growth have evaporated as the year has gone on.

However, predictions of earnings growth of around 12 percentfor the Euro STOXX 50 are holding up this year,leaving the index set for its biggest rise in earnings since a36 percent rise in 2010.

Buoyed by an asset purchase programme by the EuropeanCentral Bank, funds have been pouring in to European equities asbets build that growth will return to the euro zone economy.

"There's a genuine economic recovery in the euro zone (and)sectors like the banks start to look a little more interesting,"said James Barty, head of European equity strategy at Bank ofAmerica Merrill Lynch.

The situation on Britain's FTSE 100 is a starkcontrast, where companies have posted a 22 percent fall inyear-on-year earnings.

The index is set to see earnings slide 11.6 percent thisyear, with forecasts steadily cut since an oil price rout beganin late 2014. At that time, earnings were expected to grownearly 10 percent in 2015.

Even the banks, which are favoured in the euro zone fortheir domestic exposure, are at risk on the FTSE 100, with HSBC and Standard Chartered having large businessesin Asia.

The pockets of the euro zone stock market affected by therecent moves in China will need to be reassessed, however.

"We've been cutting exposure to exporters since earlyApril," said Dennis Jose, European equity strategist atBarclays, adding he was rotating into domestic stocks.

JP Morgan equity analyst Prabhav Bhadani said that whileexporters had been top performers in the first quarter, a secondquarter improvement for domestically exposed stocks meant he wasstill confident of double digit earnings growth.

"However, it would be difficult to be overweight autos,luxury or industrials, which have a lot of leverage to the Chinasituation," he said.

(Reporting by Alistair Smout; Editing by Keith Weir)