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* FTSEurofirst 300, STOXX 600 up 0.6 pct
* Banking stocks among top gainers
* Shares in EDF, Generali, Kering surge
By Atul Prakash
LONDON, July 29 (Reuters) - European shares advanced on Friday following some encouraging company updates, with EDF surging after its board approved the company’s Hinkley Point nuclear project and Kering gaining after its fashion brand Gucci recorded strong sales.
Financial services were in demand, with the STOXX Europe 600 Banks index rising 2.3 percent, helped by a rally in Barclays and UBS after releasing results.
UBS, the world’s largest wealth manager, rose 3.1 percent after beating second-quarter profit estimates. However, Switzerland’s top bank cautioned that tough market conditions were likely to continue for the foreseeable future.
Barclays rose 5.6 percent. Although the bank reported a 21 percent dip in first-half pre-tax profits, profits from its core businesses, including consumer and commercial lending, credit cards and investment banking, rose 19 percent to 2.4 billion pounds ($3.16 billion).
“The new boss, Jes Staley, seems determined to get on with the task of getting rid of the bad bank sooner rather than later,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.
“If and when Barclays gets rid of its non-core businesses, it should start to look more like an upstanding citizen of the banking sector.”
Banks will remain in focus before the results of the 2016 stress tests for 51 lenders across the European Union, to be published by the European Banking Authority at 20.00 GMT on Friday.
The pan-European STOXX 600 and the FTSEurofirst 300 indexes both rose 0.6 percent in morning trading after closing nearly 1 percent lower the day before. They are on track for their third straight week of gains.
Several individual shares reacted sharply following their updates. EDF rose 10 percent after saying it was confident about the new British government’s commitment to build nuclear reactors in Hinkley Point.
Late on Thursday, shortly after EDF announced its board had given the go-ahead for the project, the government of Britain’s new Prime Minister Theresa May said it wanted to give the project further consideration.
Italy’s top insurer Assicurazioni Generali reported a 10.5 percent drop in first-half operating profit but beat market expectations. Its shares advanced 9 percent.
Kering shares rose 7 percent after Gucci also beat forecasts with second-quarter organic sales growth of 7.4 percent, driven by demand for the brand’s new looks designed by Alessandro Michele, particularly in Western Europe.
According to Thomson Reuters I/B/E/S data, 111 companies in the STOXX 600 have reported second-quarter results so far. Of those, 42 percent have exceeded analyst estimates, against a long-term average of 49 percent. Overall earnings are expected to fall 11.3 percent in the quarter from the same period of 2015.
Among other movers, Pearson fell 6 percent after the world’s biggest education company said first-half underlying sales fell more than expected, hurt by declines in assessment revenue in the United States and the UK.
Mid-cap British company Essentra slumped 20 percent, the top decliners in the STOXX 600 index, after reporting a 7 percent fall in its half yearly revenue.
$1 = 0.7589 pounds Editing by Larry King