May 4, 2017 / 12:56 PM / a year ago

European shares power ahead as Q1 earnings season gathers pace, HSBC jumps

* STOXX 600 up 0.4 pct

* More than 80 pct of European firms beat revenues so far

* HSBC jumps after solid Q1, banking sector leads

* Statoil, Shell earnings boost oil stocks (Adds detail, updates prices)

By Kit Rees

LONDON, May 4 (Reuters) - A flurry of well-received earnings updates boosted European shares on Thursday, with positive numbers from HSBC supporting financials while oil stocks also rose.

The pan-European STOXX 600 index was up 0.4 percent, holding at 20-month highs, while Germany’s benchmark DAX index rose 0.8 percent to hit a fresh all-time high.

As the European earnings season nears the halfway mark, more than 80 percent of firms which have reported first quarter results so far have beaten analyst expectations for revenues, showing that a recovery in demand is driving sales, according to Thomson Reuters I/B/E/S data.

“The numbers (for Europe) are stronger than in the U.S., with the average earnings surprise standing at more than 10%, while sales surprises are a strong 2.4%,” analysts at Credit Suisse said in a note.

European banks were top gainers, rising 1.3 percent after lender HSBC jumped 3.6 percent. HSBC posted a better-than-expected first-quarter profit and capital position.

“Overall we view this as a positive set of results,” Gary Greenwood, analyst at Shore Capital Markets, said in a note, adding that the figures could potentially push up forecasts.

Likewise a decision by the U.S. Federal Reserve to keep interest rates on hold also helped the sector, as banks benefit from a higher interest rate environment.

Oil & gas stocks were also firmer, up 0.5 percent following robust updates from Statoil and Royal Dutch Shell, which both rose 1.6 percent.

“We have seen a sharp recovery in profits and strong cash flow from Royal Dutch Shell this quarter,” said Simon Gergel, UK equities CIO at Allianz Global Investors.

“The company has generated sufficient cash to cover capital expenditure and the full cost of dividends ... This provides further reassurance about the benefits of the BG deal to the group’s cash flow and the sustainability of the company’s dividends.”

Results also boosted shares in brewer AB InBev and Austrian engineer Andritz, which were among top STOXX 600 gainers.

Swedish biometric firm Fingerprint Cards was the biggest STOXX faller, however, dropping 5.4 percent after an underwhelming first quarter report.

Fingerprint’s operating profit slumped 88 percent, coming in well below expectations, weighed down by excess inventories.

British retailer Next was also under pressure, down 4.5 percent after cutting the top end of its full-year profit guidance.

On a sectoral level, European mining firms saw some weakness as copper, aluminium and gold prices sagged, weighing on shares of aluminium producer Norsk Hydro, Centamin and Anglo American. (Reporting by Kit Rees, Editing by Helen Reid and Jon Boyle)

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