Europe stocks reverse losses; autos, airlines jump

LONDON, Sept 2 (Reuters) - European stocks reversed early losses to trade 0.7 percent higher on Tuesday morning, as a sharp fall in the oil price and a decline in the euro outweighed losses in energy shares.

At 0756 GMT the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.7 percent at 1,197.24 points, led higher by banks and auto stocks.

Oil CLc1 slumped $8.55 to $106.93 a barrel as concerns over a major supply disruption from Hurricane Gustav receded.

The euro fell below $1.45 EUR= as oil's decline lifted the dollar, potentially helping European exporters. BMW (BMWG.DE), Daimler (DAIGn.DE), Peugeot (PEUP.PA) and Renault (RENA.PA) rose 2.7-3.9 percent.

Travel groups Thomas Cook (TCG.L) and Carnival (CCL.L) jumped more than 6 percent on the lower oil price, which also lifted airlines Lufthansa (LHAG.DE), Air France KLM (AIRF.PA) and British Airways BAY.L by 5-6.7 percent.

(Reporting by Sitaraman Shankar)