Miners drive European shares to one-month closing high
* FTSEurofirst 300 ends up 0.8 percent at 1,188.95
* Miners rally as Alcoa beats profit expectations
* RBS lifted by GS upgrade
* Osram rallies on bullish HSBC, UBS comment
LONDON, July 9 (Reuters) - Miners powered European shares to their highest close in a month on Tuesday after encouraging results from U.S. peer Alcoa and a bullish outlook boosted sentiment in the sector.
The FTSEurofirst 300 provisionally closed up 9.27 points, or 0.8 percent, at 1,188.95, extending a rebound that has seen the index rally more than 6.5 percent from June lows.
Basic resources shares jumped 2.4 percent after U.S. aluminium maker Alcoa unveiled a larger-than-expected adjusted second-quarter profit and forecast higher demand.
According to Thomson Reuters StarMine, top analysts predict that STOXX Europe 600 companies will beat expectations for the second quarter by 0.4 percent.
"There are seeds of recovery out there now that were not there a year ago. I think we are pretty close to a turning point in earnings downgrades for European companies," Robert Quinn, chief European equity strategist at Standard & Poor's Capital IQ, said.
"The weakness we have seen in equity markets recently has coincided with pretty good fundamentals and investor sentiment has cooled down from peaks earlier this year, so you have a sweet spot for European equities," he said.
Comment from Deutsche Bank also helped basic resources stocks, which are still down 27.7 percent on the year on earnings worries.
Deutsche raised its rating on the sector to "neutral" from "underweight" on valuation grounds and said a nascent turnaround in growth prospects in the euro area and the UK lead it to favour "cyclical" stocks exposed to domestic economic optimism.
Gains were to be had across the board as auto-related stocks , financial services, chemicals, and real estate companies all rose more than 1.3 percent.
Geoffroy Goenen, head of fundamental European equity at Dexia Asset Management, remains "overweight" in equities heading into the second half of the year, supported by valuations and improving growth metrics.
"The central banks are still injecting liquidity into the markets and the search for returns and growth should underpin the equity markets further in the coming months ... The markets could find additional support in the bottoming out of the economy in the euro zone," he said.
Banks managed a 0.5 percent rise but Royal Bank of Scotland jumped 5.4 percent after Goldman Sachs upgraded it to "buy" and raised its target price to 370 pence from 350 pence. That implies a near 30 percent upside from current levels, with Goldman saying plans to split up the bank could be good for investors.
German lighting company Osram Licht AG, a spin-off of engineering group Siemens AG, surged 17 percent to 27.84 euros, roaring back on its second day of trading, on bullish comment from UBS and HSBC. They see as much as 40 percent upside from Monday's close.
State-owned French utility EDF climbed 9.3 percent after the French government announced it was planning the biggest increase in power prices in at least a decade to cover rising costs.