Banks push European shares to 5-week high; UBS up

* FTSEurofirst 300 index rises 0.7 percent

* UBS soars after results beat expectations

* IHG slips after Barclay brothers sell stake

* For up-to-the minute market news, click on [STXNEWS/EU] By Joanne Frearson

LONDON, July 27 (Reuters) - European shares hit a five-week high on Tuesday, gaining for a sixth consecutive session, boosted by strong corporate earnings from banks, with UBS (UBSN.VX) soaring after results beat analysts' expectations.

By 1048 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was up 0.7 percent at 1,056.01 points.

The Euro STOXX 50 index .STOXX50E, the euro zone's blue-chip index, was up 1 percent at 2,770.51 points, holding above its 50 percent Fibonacci retracement from a high in April to a low in May of 2,737.62 points -- a key technical level which it crossed for the first time in five weeks on Monday.

"We have had good European earnings today, with the highlights UBS and Deutsche Bank," said Angus Campbell, head of sales at Capital Spreads.

"It is a much rosier picture for European equities and there is a continuation of the good sentiment following the stress tests last week. Banks across Europe are very bullish. For the moment, the momentum is certainly behind the bulls."

Banks were the top performers, with the STOXX Europe 600 Banks .SX7P surging 4.3 percent, touching its highest level in 13 weeks. UBS (UBSN.VX) jumped 9.4 percent, after strong equities and currency revenues drove the Swiss bank's second-quarter net profit well above forecasts. [ID:nLDE66Q0FS]

Germany's top lender Deutsche Bank (DBKGn.DE) rose 3.9 percent after it posted second-quarter pretax profit in line with expectations, helped by lower loan loss provisions amid weaker industry trends in investment banking.

According to StarMine data, 12-month forward earnings growth for the banking sector is one of the highest at 82.6 percent, compared to the STOXX 600 average of 26.3 percent.

Also helping the banking sector was news late on Monday that the Basel Committee will scale back many of its proposals to beef up bank capital and liquidity rules, signalling concessions in the face of lobbying by banks. [ID:nLDE66P1Z2]

The results of European bank stress tests late on Friday helped restore confidence in the sector as it contained no major negative surprises, and showed only seven of 91 banks failed the tests aimed at gauging banks' ability to withstand financial shocks.

ASTRAZENECA GAINS

In individual stocks, AstraZeneca (AZN.L) rose 3 percent after U.S. Food and Drug Administration documents, released ahead of a July 28 advisory panel, raised hopes for its experimental blood thinner Brilinta.

Oil major BP (BP.L) gained 0.5 percent. It launched a plan to repair its battered image in the United States, ditching its chief executive and promising to slim down by trebling an asset sale target to $30 billion. It unveiled a $17 billion quarterly loss due to the costs of the biggest oil spill in U.S. history. [ID:nLDE66Q09I]

On the downside, InterContinental Hotels (IHG) (IHG.L) slipped 7.7 percent after traders said that the billionaire Barclay brothers have sold their 10 percent stake in the company.

French property group Klepierre (LOIM.PA) fell 6 percent after its chief executive painted a glum picture of consumer spending for the rest of 2010. The firm reported a fall in first-half rental income on a like-for-like basis and a fall in net cash flow per share. [ID:nLDE66P1R1]

Across Europe, the FTSE 100 .FTSE index rose 0.7 percent, Germany's DAX .GDAXI gained 0.6 percent and France's CAC 40 .FCHI was up 1 percent. (Reporting by Joanne Frearson; Editing by Sharon Lindores)