* STOXX 600 up 0.4 pct, blue chips up 0.5 pct
* BP leads oil stocks after Q2 beat
* Results boost Rolls-Royce, Intertek Group, Direct Line
* ASM International hit by downgrade (Adds quote and detail, updates prices)
LONDON, Aug 1 (Reuters) - European shares rose on Tuesday, looking to recover after two straight months of losses, with corporate earnings reports spurring brisk trading ahead of a typically sleepy period for markets over the summer.
The pan-European STOXX 600 index, nursing two straight months of losses, rose 0.4 percent. Blue chips were 0.5 percent higher.
Germany's DAX advanced 0.4 percent while Britain's commodities-heavy FTSE 100 gained 0.8 percent as oil stocks rose.
Earnings updates dominated the action, with oil heavyweight BP rising more than 3 percent and boosting the oil & gas sector after beating forecasts as new projects supported production. "BP has covered the cash component of the dividend with free cash flow for the second straight quarter and the Upstream business is performing well," analysts at Jefferies said in a note.
The European second-quarter earnings season is nearing the halfway mark and so far 60 percent of MSCI Europe firms have met or beaten analysts' expectations, according to Thomson Reuters data.
Earnings per share growth in Europe was tracking at about 13 percent, including a significant boost from energy firms, according to latest data from JPMorgan.
"You have seen some signs of (the) green shoots of recovery within the European economy and that, of course, is good for companies," Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
"Valuation is not challenging, but the company's ability to de-lever the balance sheet remains a concern."
British companies were the top gainers, with aerospace and defence firm Rolls-Royce shooting up 7 percent after beating expectations with a rise in first-half profit thanks to a step-up in production.
It was joined by testing firm Intertek Group, insurer Direct Line and Dutch chemicals company DSM , which all gained between 5.7 percent to 9 percent on the back of well-received results.
Lender CYBG was the top-gaining bank, rocketing 6.7 percent on strong third-quarter results. Financials were the biggest contributors to gains on the STOXX.
While moves among fallers were fairly muted, precious metals miner Fresnillo was the biggest faller in the basic resources sector, dropping more than 1.5 percent after its first-half update.
Tech firm ASM International was weighed down by a downgrade to "equal-weight" from Morgan Stanley, which cited currency-related headwinds looking ahead to 2018. (Reporting by Kit Rees, Editing by Vikram Subhedar and Susan Thomas)