* FTSE hit by Shell, miners, BoE growth forecast cut
* LSE surges to record high on Refinitiv deal
* BAT shares jump after beating H1 sales forecast(Updates to close)
By Sruthi Shankar and Medha Singh
Aug 1 (Reuters) - European shares ended higher on Thursdayas strong earnings from British American Tobacco and amultibillion dollar merger in the financial sector helped dispelearly gloom after the U.S. Federal Reserve played down prospectsfor several rate cuts.
Providing the biggest boost to Europe's main STOXX 600, which closed up 0.5%, was a 7% jump in shares ofBritish American Tobacco after it beat first-half salesforecasts and predicted a stronger second half.
London Stock Exchange Group rose 6.5% to a recordhigh after it formally announced its $27 billion merger withfinancial information firm Refinitiv, lifting Europe's financialservices index 2.3% and making it the top gainer.
"This seems to be a deal which puts LSE back on the mapafter a very uncertain period when it was almost bought out andgives it an opportunity to compete with some of the biggernames," said Craig Erlam, senior market analyst at Oanda.
Reuters News' parent Thomson Reuters holds a 45% stake inRefinitiv and will own 15% in LSE after the deal.
The banking sector was boosted by results fromEuropean majors Barclays, Standard Charteredand Societe Generale.
Barclays climbed 1.2% after it raised its interim dividend.Asia-focused Standard Chartered was up 3.3% following strongfirst-half profits and France's SocGen gained 5.8% after it hitits solvency target a year early.
European markets opened in the red following overnightweakness on Wall Street and Asian markets after the FederalReserve cut interest rates, as expected, but disappointedinvestors hoping for a clear sign of several more cuts to cometo support growth and stock market valuations.
The dent to sentiment from the Fed hurt commodities markets,with a fall in iron ore, copper and oil prices pulling downshares of mining and energy majors.
The oil and gas sector slid 1.5%, hit by a slump in sharesof Royal Dutch Shell after its second-quarter profitdropped to a 30-month low on weaker gas prices and refiningmargins.
The materials index, down 3%, recorded its biggestpercentage fall since December 2018, with London-listed sharesof Rio Tinto slipping despite the company reporting a12% jump in first-half profit and declaring a bumper dividend.
As a result, London's FTSE 100 lagged its Europeanpeers. Adding to the gloom there, the Bank of England loweredits growth forecasts for Britain in the face of growing Brexitworries and a slowing global economy. The UK-exposed midcap FTSE250 was down 0.2%.(Reporting by Sruthi Shankar and Medha Singh in Bengaluru;Editing by Sweta Singh and Mark Potter)
