* Chinese data soothes investors nerves, focus turns to GDP
* European stock volatility falls to its lowest since Jan2018
* Lufthansa delivers bigger-than-expected Q1 loss
* Zalando rallies after upbeat profit forecast (Updates to close, adds details)By Agamoni GhoshApril 16 (Reuters) - European shares ended at an eight-monthhigh on Tuesday, bolstered by banking and financial stocks,upbeat data from China and the improving economic mood inGermany.
The pan-European STOXX 600 index rose for afifth-straight session led by the Swiss index andGermany's trade-sensitive DAX .
The index of STOXX 50 volatility , the main gauge ofmarket anxiety in Europe, fell to its lowest since mid-January2018 helped by a shortened trading week for the Easter holidays.The banking , financial and insurance sectors provided the major boost, mostly drawing from earningsof big Wall street banks, with JPMorgan Chase & Co kicking off U.S. earnings on a strong note last week.Bank of America Corp's earnings also toppedexpectations but Goldman Sachs Group Inc and CitigroupInc disappointed with revenue misses, although bothlenders beat quarterly profit estimates. "We saw a sort of a selloff in Wall Street giants GoldmanSachs and Citigroup but if you look at the bank earnings, youcan clearly see they were really really strong," said NaeemAslam, chief market analyst at TF Global Markets (UK) Ltd inLondon."This optimism is feeding into the European banking sectoras well. When they start to announce their earnings, theexpectations are high that we are going to see some good numberscoming out of European banks after a long time."Italy's top bank, UniCredit SpA , rose over 3percent after it and two subsidiaries agreed to pay $1.3 billionto U.S. authorities to settle investigations of violations ofU.S. sanctions on Iran and other countries. Italy's FTMIB however, barely scraped through intopositive territory as the Bank of Italy's warning of thecountry's deficit possibly breaching European Union regulationsin 2020 weighed on the bank-heavy index.APPRAISING INDICATORSAiding sentiment was better-than-expected home price numbers from China for March and a ZEW survey showing that mood amongGerman investors improved in April.All eyes are now on Chinese quarterly GDP data due onWednesday as firmer data in the world's second-largest economymay imply an improvement in the global export picture,benefiting export-oriented economies in the region like Germany.Among individual stock movers, Zalando took thespotlight, rising more than 10 percent and emerging as the bestperformer on the STOXX after the e-commerce company said itexpected to post an operating profit for the first quarter. Steel pipe maker Tenaris rose over 3 percent afteran Argentine court reversed a decision against the company'schief executive and chairman.Germany's biggest airline Lufthansa had fallenearlier in the day after posting a loss in the first quarterhurt by rising fuel costs and over-capacity in Europe.The carrier reversed losses to end about 1 percent higherwith traders saying the bad news ailing the airline and thebroader industry was priced in after easyJet's warninglast week and WOW airline's bankruptcy in late-March.
Among the biggest drags on the index were oil stocks including BP , Total and Royal Dutch Shell tracking declining crude prices. On London's FTSE 250 , Galliford Try slumped20 percent after the house-builder said it was undertaking astrategic review of its construction business which would reduceits size and lead to a fall in annual profit. If the firm ditched its infrastructure arm and focused onhouse-building alone, it might do better, since the record overthe past year for the division has been grim, Chris Beauchamp,chief market analyst at IG, wrote in a note. (Reporting by Medha Singh, Susan Mathew and Agamoni Ghosh inBengaluruEditing by Andrew Heavens and Andrew Cawthorne)
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