UPDATE 2-European shares jump as hopes of Brexit deal grow

* STOXX 600 jumps 1% on Bloomberg report on Brexit deal

* Wirecard sinks after FT report

* Recruiter Hays jumps after first-quarter results
(Updates to market close)

By Sruthi Shankar

Oct 15 (Reuters) - European stocks rose to their highest in
nearly three months on Tuesday, with Irish stocks soaring almost
3%, after a news report said negotiators were on the verge of a
deal that would avoid Britain crashing out of the European
Union.

Shares in Irish companies, which are hugely reliant
on UK business and seen as a barometer of market worries about
Brexit, hit their highest in more than a year.

Two EU officials said a Bloomberg report of an imminent
Brexit deal was "premature". However, a third official said
there had been some "serious convergence of views" in technical
talks while chief EU negotiator Michel Barnier and other senior
officials said progress was being made.

Any new deal will still have to go to a fractious British
parliament which rejected several attempts by Prime Minister
Boris Johnson's predecessor Theresa May to push through the
withdrawal agreement she agreed with Brussels.

"There are indications that this could be a more palatable
option compared to May's deal which has been rejected thrice
previously," said Andrea Cicione, head of strategy at TS
Lombard. "That's clearly a good development."

With the pound surging on the positive noise around Brexit,
internationally-focused firms on London's blue chip FTSE 100
came under pressure, while the domestically-focused
midcap index climbed 1.3%.

British banks Lloyds, Royal Bank of Scotland
and Barclays, considered some of the most
vulnerable to the UK economy and Brexit uncertainty, rose
between 4% and 5%.

The pan European STOXX 600 index jumped 1.1%, with
other major regional indices including Germany's DAX
and France's CAC 40 gaining a similar amount.

Also boosting sentiment was an upbeat start to the U.S.
quarterly earnings season with better than expected reports from
J.P. Morgan and Johnson & Johnson.

"The kick off of reporting season could support today's
sentiment as markets try to cross-read some positive numbers
coming from the United States," said Societe Generale European
equity strategist Roland Kaloyan.

Europe's bank index rose 2.5%, leading gains among
the major sectors, while retailers gained 2.4%.

Recruiter Hays Plc jumped 8.1% after it reported
steady first-quarter net fees due to strong hiring in the United
States and China.

Shares in Wirecard, however, slumped 12.8% after
the Financial Times published documents on the company's
accounting practices alleging an effort to inflate sales and
profits, dealers said.

Dutch semiconductor equipment maker ASML gained 3%
after reports that South Korea's Samsung has agreed to buy
high-end lithography machines from the company.

German meal-kit company Hellofresh rose 23.4%
after the company raised its full year forecast, hauling
Germany's small-cap index 1.7% higher.
(Reporting by Sruthi Shankar and Susan Mathew in Bengaluru;
Editing by David Clarke)