REFILE-UPDATE 1-Encouraging trade talks boost European shares

(Refiles for dropped letter in headline)
* China in close touch with U.S. for Oct trade talks
* Tech stocks bounce on upbeat trade tone
* Imperial Brands slides on profit warning
* STOXX 600 still set for first weekly drop in six

By Shreyashi Sanyal and Sruthi Shankar
Sept 26 (Reuters) - European shares moved higher on
Thursday, with technology shares leading the charge after
encouraging comments from China on trade with the United States
soothed sentiment that was rattled by growth worries and
political turmoil.
The Chinese commerce ministry said Beijing is in close
communication with Washington and is preparing to make progress
at trade talks in October. Although investors are keeping a close watch and doubt a
deal could be struck between the two sides in the near future,
they are hopeful of any signs of progress in the negotiations.
"There will be a deal towards the second quarter of the
upcoming year," said ING economist Timme Spakman, while adding
that the U.S. needs to take a step back and give China some
breathing space to make room for a deal.
Trade-sensitive tech stocks .SX8P jumped 1.1%, helping the
pan-European STOXX 600 index .STOXX rise 0.5%.
Euro zone's blue-chip index .STOXX50E climbed 0.5%,
boosted by shares of semiconductor maker ASML Holdings
ASML.AS , while export-reliant Germany .GDAXI gained 0.4%.
The comments on U.S.-China trade also helped spark a
reversal in early losses after Bloomberg reported the World
Trade Organization will authorize the U.S. to impose tariffs on
nearly $8 billion of European goods due to illegal state aid
provided to aircraft maker Airbus SE AIR.PA .
European equity markets closed at two-week lows on Wednesday
on fears about an impeachment inquiry into U.S. President Donald
Trump and no clear view on progress in U.S.-China trade
negotiations.
Investor confidence has also been shaken by weak readings on
economic data and recent profit warnings from big European
companies, which have fueled renewed fears of a corporate blood
bath for the upcoming earnings season.
The latest warning came from Imperial Brands Plc IMB.L ,
which tumbled 10.2%, after it said its expects full-year profit
to be flat compared to last year in the face of a regulatory
backlash against vaping in the United States. Shares of peer British American Tobacco Plc BATS.L also
fell 2.2%.
The personal & household goods index .SXQP rose 0.1%,
logging the smallest gain among major European sub-sectors.
Pearson PSON.L slid 16.7%, to the bottom of the STOXX 600,
after the British education company warned its full-year profit
would come in at the bottom of its forecast range.
However, Belgian supermarket chain Colruyt COLR.BR jumped
5.2% after the company said it expected full-year net income to
rise slightly.