Tech, retail stocks boost STOXX 600 to one-week high

Telecom Italia gains as CEO set for second term

*

Novartis raises guidance after beating Q1 expectations

*

SAP rises after Q1 cloud backlog accelerates

*

EZ business in services-led bounce in April, PMI survey shows

*

STOXX 600 up 1.1%

April 23 (Reuters) - European shares logged their best day in six weeks on Tuesday, driven by the retail and technology sector as investors found comfort in upbeat corporate updates, while the UK's FTSE 100 index hit its all-time peak.

The pan-European STOXX 600 index jumped 1.1% boosted by technology shares that advanced 2.6% as SAP reported a 24% jump in first-quarter cloud revenue to 3.93 billion euros ($4.19 billion), buoyed by demand for its enterprise resource planning software.

Shares of the German company climbed 5.3%.

Italian stocks were the best performers among European peers and Britain's FTSE 100 closed at a record high for a second day, helped by a weaker pound and positive corporate updates.

"This is a momentous occasion for the UK index, but the outperformance has been building for the past month. As market volatility has risen, the FTSE 100's defensive qualities have boosted its attractiveness," said Kathleen Brooks, research director at XTB.

Adding to the gains on the benchmark index, retail sector climbed 2.2%, with Hennes & Mauritz rising 4.2% as Morgan Stanley raised the target price on the stock.

JD Sports Fashion rose 3.8% after Britain's biggest sportswear retailer proposed to buy American athletic fashion retailer Hibbett Inc for about $1.08 billion.

Shares of Swedish banking platform Nordnet topped STOXX 600 with 9.0% gain following a beat on its first quarter operating profit.

Associated British Foods also gained 9.0% after the Primark owner forecast "significant growth" in full-year profit.

On the flip side, Randstad, the world's biggest employment agency, reported disappointing quarterly core earnings, sending shares of the Dutch firm down 7.2%, among top decliners on the STOXX.

Equities have been making a steady recovery from over a month's low as fears of a wider Middle East conflict ebbed, companies are reporting positive earning updates and hopes of imminent interest rates rose.

Overall, first-quarter earnings are expected to decrease 12.1% from a year ago, LSEG data showed last week.

Among other movers, Novartis was up 1.8% as the Swiss drugmaker raised its full-year outlook after reporting first-quarter results that surpassed expectations.

Telecom Italia gained nearly 2% after CEO Pietro Labriola appeared set to secure a second term as leading investor Vivendi decided to abstain in a shareholder vote on the renewal of the former phone monopoly's board.

Meanwhile, business activity overall in the euro zone expanded at its fastest pace in nearly a year this month as a buoyant recovery in the bloc's dominant service industry more than offset a deeper downturn in manufacturing.

(Reporting by Johann M Cherian and Shubham Batra in Bengaluru; Editing by Sherry Jacob-Phillips, Sohini Goswami and Nick Zieminski)