UPDATE 2-European shares nudge higher as L'Oreal outweighs bank earnings upset

* L'Oreal jumps on quarterly revenue beat
* Deutsche Bank , Santander pressure banks
* Fiat Chrysler confirms deal talks with PSA
* Eyes on Federal Reserve meeting

(Updates to close, adds comments)
By Shreyashi Sanyal and Agamoni Ghosh
Oct 30 (Reuters) - European shares eked out gains on
Wednesday, buoyed by upbeat results from L'Oreal which defied
Chinese slowdown fears, although weak earnings from some of the
bloc's biggest lenders such as Deutsche Bank and Santander kept
a lid on gains.
The pan-European STOXX 600 index .STOXX was up 0.1%, with
a 1.5% rise in the personal & household goods sector .SXQP
leading gains.
Providing the biggest boost to the sector was L'Oreal's
OREP.PA 7.6% jump, after the Lancome owner beat quarterly
revenue forecasts aided by robust demand across Asia and
especially in mainland China.
Expectations had been low going into the European corporate
earnings season, and after three weeks the overall picture has
proved better than expected, with most companies modestly
beating estimates.
"We are almost half way through these earnings and growth
seems to have been slightly ahead of forecast. Overall it's been
quite positive for Europe," said Martin Todd, portfolio manager
at Hermes Investment Management.
Disappointing results from some of the Europe's top lenders,
pushed banks .SX7P 1.9% lower, clocking the biggest decline
among the major sub-sectors.
Deutsche Bank DBKGn.DE fell 8%, as it reported a loss for
the second consecutive quarter due to the costs of its
wide-ranging global restructuring. The bank also pressured
Frankfurt shares .GDAXI , which dropped 0.2%. Spanish stocks .IBEX lost 1.2%, lagging the most across
major country indexes, hurt by a 4.1% slide in Santander
SAN.MC shares.
The euro zone's biggest lender said net profit fell 75% due
to one-off charges in the UK. Another disappointment was Swiss lender Credit Suisse
CSGN.S , which shed 2.6% after issuing a cautious 2020 outlook.
Market participants took heart from a warmer tone around
U.S.-China trade relations after the White House said the Trump
administration still expects to sign an initial trade agreement
with China next month despite the cancellation of the APEC
summit in Chile where officials had hoped to finalize the pact.

All eyes are now on the U.S. Federal Reserve's decision on
interest rates at 1800 GMT, with a cut in borrowing costs for
the third time this year almost certain.

CAR TIE-UP EXCITEMENT
Italian-American carmaker Fiat Chrysler FCHA.MI confirmed
it was in merger talks with French rival PSA PEUP.PA on a deal
that would reshape the global industry. Shares of both companies rose 9.5% and 4.5% respectively,
with Peugeot hitting an 11-year high. Shares in another French
carmaker, Renault RENA.PA , which was in talks with Fiat
earlier this year about a similar deal, slid 4%.
"Consolidation would make sense, where in you combine R&D
budget, save on raw materials and get some benefits of scale
from production," said Todd.
Among other stocks, Italian tyre-maker Pirelli PIRC.MI
slumped 10.7%, to the bottom of STOXX 600, after lowering its
guidance on operating profit margin and cash flow, and as it
said it would delay the presentation of its new business plan in
a worsening market scenario.