(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)
* Pan-European FTSEurofirst 300 gains 5 pct
* UPM, BP up on better-than-expected results
* Cobham slumps after rights issue announcement
By Atul Prakash
LONDON, April 26 (Reuters) - Encouraging company results and firmer oil prices helped European equities to rebound on Tuesday, with pulp and paper maker UPM and oil major BP climbing higher after their better-than-expected reports.
UPM surged 10 percent, the biggest gain in the pan-European FTSEurofirst 300, after reporting a 34 percent rise in adjusted operating profit in the first quarter.
"European equity markets are trading moderately higher on positive corporate earnings surprises from several companies," said Markus Huber, a trader at City of London Markets.
In addition, markets see no chance the Federal Reserve will raise U.S. interest rates when it meets tomorrow and Thursday. They see only one chance in five it will move at the next meeting, on June 14-15.
That means "many traders are at least temporarily moving their overall exposure to more neutral from previous negative, consequently closing some of their short positions," Huber said.
The pan-European FTSEurofirst 300 index, which closed 0.6 percent lower on Monday after hitting a three-month high in the previous week, was 0.7 percent higher by 0807 GMT.
The European oil and gas index rose 1.1 percent after oil advanced on a weaker dollar and a flood of new cash into the market, although some analysts warned of more output from Saudi Arabia and Iran.
Shares in BP rose 3.2 percent. The company's profit dropped 80 percent in the first quarter, but it beat analysts' expectations. BP also held its dividend and said it could cut capital spending further.
"... It appears the result was positively impacted by better availability, lower costs and importantly a better trading result," RBC analysts said in a note.
Whitbread, which runs Premier Inn budget hotels and the Costa Coffee chain, gained 3 percent after saying its full-year underlying pre-tax profit surged nearly 12 percent.
The earnings season is gaining momentum in Europe. According to Thomson Reuters StarMine data, 16 percent companies in the STOXX Europe 600 have reported results so far, of which half have met or beaten analyst forecasts.
On the negative side, mid-cap firm Cobham slumped nearly 20 percent after the British engineering company proposed a 500 million pounds ($724.80 million) rights issue after warning that 2016 profits would fall.
Today's European research round-up
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Mike Dolan, Markets Editor EMEA.