European shares stride into May as earnings power gains

* STOXX 600 ends at 20-month high, up 0.75 pct

* Euro zone factory activity hits 6-year high

* Ocado jumps on M&S delivery tie-up report

* Flows recovering at Aberdeen (Adds details, closing prices)

By Helen Reid and Danilo Masoni

LONDON, May 2 (Reuters) - European shares kicked off the first trading day of May with gains underpinned by healthy corporate earnings, and manufacturing data added to evidence of a robust underlying economy in the region.

Financials and industrial stocks provided the biggest boost to the pan-European STOXX 600, which ended up 0.75 percent, its highest level since August 2015.

French bluechips rose to their highest point in nearly a decade and Germany’s DAX wound up at a new all-time high, while the euro zone STOXX index bounced to its highest level for two years.

With about a third of the MSCI Europe having reported first-quarter results, corporate profit growth in the region was running neck-and-neck with the healthy clip seen in the United States. Overall, for the first quarter earnings in Europe are seen growing 13.9 percent, according to Thomson Reuters I/B/E/S.

Brokers were watching the first-quarter results season as a crucial factor in their argument for European equities’ outperformance.

Euro zone factory activity hit a six-year high in April, a PMI survey showed, as demand remained strong despite rising prices.

This added to a series of data points indicating the economic backdrop for European corporates was improving.

“The economy is doing better within Europe, but these also tend to be global companies,” said Isabelle Mateos Y Lago, chief multi-asset strategist at Blackrock.

“The main reason why we are optimistic is because European companies are extremely well plugged in to benefit from the global reflation story, from China and US growth picking up.”

British oil major BP gained 1.6 percent after its first-quarter profits tripled, thanks to higher oil prices and production.

Fund manager Aberdeen gained 4.3 percent after its first-half results added to signs of fightback by active fund managers against the passive tracker funds eroding their market share.

The pace of outflows from Aberdeen’s funds slowed slightly and revenues rose 10.6 percent thanks to market gains and cost cuts.

Shares in online food delivery company Ocado jumped up to 8.9 percent. Traders cited a report of a delivery tie-up with supermarket M&S. Ocado’s shares are among the most-heavily shorted in the UK.

Swiss materials company OC Oerlikon gained 6.7 percent after it raised its targets for sales and orders for 2017, reporting a strong first quarter.

Among fallers, Swedish polymer producer Hexpol dropped 9.4 percent after broker Kepler Cheuvreux cut the stock to “hold” from “buy”, saying that following a recent rally the company’s shares now reflected expected growth.

Kepler analysts were still relatively positive on the company, saying strong cash flow and balance sheet leave room for acquisitions to drive growth.

Jyske Bank underperformed Europe’s financials, down 3.5 percent after the Danish lender posted first-quarter results with weaker net interest income and capital ratio. It traded in heavy volume and scored its worst day in six months.

Fiat Chrysler fell 4.2 percent after data showing its U.S. car sales dropped 7 percent in April. (Reporting by Helen Reid and Danilo Masoni; Editing by Vikram Subhedar and Mark Heinrich)