July 27, 2016 / 9:07 AM / 2 years ago

UPDATE 1-European shares rise as luxury stocks, autos gain on results

* European shares rise, STOXX 600 up 0.5 pct

* LVMH leads luxury stocks after strong Q2

* Autos also rise after Peugeot results

* Though Deutsche Bank, BASF drop

* France’s Ingenico Group slumps after H1 results (Adds company news and quotes, updates prices)

By Kit Rees

LONDON, July 27 (Reuters) - European shares rose on Wednesday, led higher by auto stocks and several companies such as luxury group LVMH and France’s Peugeot that advanced after their results.

The pan-European STOXX 600 index rose 0.5 percent, as did the FTSEurofirst 300.

France’s LVMH was up 7.5 percent after its fashion and leather Q2 sales beat forecasts, helped by solid demand in the United States and improved trading in Asia, excluding Japan. It was on track for its biggest one-day gain since February 2015.

“Our Buy case on LVMH hinges on the underappreciated resilience of the Louis Vuitton brand combined with the defensiveness and momentum of the wider portfolio. H1 results reinforced our confidence in this view,” analysts at UBS said in a note.

Luxury peers Christian Dior and Kering also gained 3.8 percent and 2.3 percent respectively.

Auto stocks were the top sectoral gainers, up 2.6 percent, following a well-received update from France’s Peugeot , which jumped 8.8 percent.

Volkswagen gained 3 percent after a $14.7 billion settlement of its U.S. diesel emissions cheating scandal cleared another legal hurdle as a federal judge gave the automaker preliminary approval to buy back up to 475,000 vehicles.

Gains in the auto sector helped Germany’s DAX index recoup the last of its post-Brexit losses as it traded up 0.9 percent.

The top riser on the STOXX 600 index was French IT services group Atos, which rose 8 percent after hiking its outlook.

It was joined by British broadcaster ITV, which jumped 8 percent on the back of its advertising revenue forecast.

“There’s been a lot of negativity priced in to the more (UK) domestically-focused companies, so we like what we’re seeing this morning with ITV,” Dafydd Davies, partner at Charles Hanover Investments, said.

Likewise the beaten-down Travel & Leisure sector was given a fillip, up 0.3 percent, after Air France jumped 3.5 percent after an improvement in its earnings thanks to lower costs.

Peers IAG, Ryanair Holdings and Lufthansa also gained between 1.6 percent to 4.2 percent.

Among the top fallers, however, was Deutsche Bank which slumped more than 4 percent after revenues fell sharply in the second quarter.

Shares in French payments provider Ingenico Group dropped more than 12 percent, putting it on track for its worst day since February 2003 after its H1 results.

“North American sales ... did not grow sequentially, which in our view, considering the difficult comps Ingenico is facing in H2 in that region, implies that North America double-digit sales growth targeted by management for the full year is out of reach,” Jean Beaubois, analyst at Berenberg, said in a note.

Chemicals company BASF also fell, down 2.6 percent after reporting a drop in Q2 profit.

British IT firm Essentra was down over 7 percent following a downgrade to its rating from JP Morgan. (Reporting by Kit Rees; Editing by Raissa Kasolowsky)

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