UPDATE 2-China stimulus, trade progress help European shares mark strong start to decade

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* China cuts banks' reserve ratio for eighth time since 2018
* Trump says Phase 1 trade deal to be signed on Jan. 15
* Airbus jumps on report it became world's top planemaker
* Tullow Oil sinks as reserves at new oil well disappoint

(Updates to close)
By Susan Mathew
Jan 2 (Reuters) - Fresh monetary stimulus in Beijing and
growing Sino-U.S. trade optimism helped European shares stay
close to record highs on Thursday with banks and technology
stocks leading a broad-based rally.
Riding the high tide across global markets, the pan-European
stocks index STOXX 600 .STOXX jumped 0.9% after declining for
two straight sessions when caution crept in about how long a
U.S.-China trade truce would last.
But U.S. President Donald Trump brightened the mood on
Tuesday by saying the Phase 1 agreement would be signed on Jan.
15 at the White House. "There is an ongoing view from the market that 2020 may feel
better than 2019 did," said Will James, deputy head of European
equities at Aberdeen Standard Investments. "There is more of a
value bias to the market (given the) positive noise around
trade."
Lenders .SX7P were on a tear, up 1.9% at their highest in
nearly eight months, followed by the technology sector .SX8P
that was driven by gains in trade-sensitive chip stocks.
China-exposed mining .SXPP and auto shares .SXAP were
also among the biggest gainers along with industrials which were
lifted by a 2.3% jump in Airbus AIR.PA after it edged out
Boeing BA.N to become the world's biggest planemaker.
That lifted the wider French index .FCHI 1.1%. Bank-heavy
Spanish .IBEX and Italian .FTMIB indices gained the most in
the region, up around 1.4% each, while German shares .GDAXI
posted their best day in one month, shrugging off figures that
showed the manufacturing sector contracted further in December.
Euro zone stocks .STOXXE jumped 1.2% on Thursday despite
latest data showing factory activity in the bloc contracting for
the eleventh straight month. The benchmark European STOXX 600 index ended last year with
its biggest annual gain since the global financial crisis on
easing recession fears and a loose monetary policy by some of
the world's biggest central banks.
Signalling that it stood pat to boost a slowing economy,
China's central bank on Wednesday lowered the reserve
requirement ratio for banks for the eighth time since 2018, with
the latest cut freeing up around 800 billion yuan ($115
billion). London-listed shares .FTSE climbed 0.8%. The other key
date this month for European markets will be Jan. 31 - the
deadline for Britain's exit from the European Union. Higher
volatility during this period will also stem from companies
starting to report fourth-quarter results and expectations for
2020.
Missing out on the broader rally, Tullow Oil Plc TLW.L
shares fell 6.8% an on doubts over commercial viability of a
reservoir in its newly struck oil well in offshore Guyana.