UPDATE 1-European shares bounce back from trade shock as Airbus jumps

Shreyashi Sanyal and Sruthi Shankar

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* Blue chip index up 0.4%, Airbus jumps 4.5%

* Analysts judge direct impact of tariffs on growth limited

* STOXX 600 still near one-month lows

* Euro zone business growth stalls in Sept - PMI

* H&M jumps after first profit rise in 2 years (Updates market action, adds comments, background)

Oct 3 (Reuters) - European shares steadied on Thursday after logging their worst day since last December on the slapping of U.S. tariffs on a raft of European exports, with a bounce for Airbus and luxury goods makers pushing main indexes back into the black.

The blue-chip and wider STOXX 600 pan-European indexes sank almost 3% on Wednesday after the World Trade Organization approved 10% tariffs on European-made Airbus planes and 25% duties on goods ranging from French wine to Scotch whisky.

After the initial shock of the decision, however, read as threatening a new transatlantic trade war, many analysts said that the detailed list of products affected showed the actual economic impact of the tariffs should be minimal.

Shares of Airbus, down 2% on Wednesday, jumped 4.5% in early trade, as the list - published after European markets closed on Wednesday - showed it had exempted some Airbus parts.

Luxury brands including French spirits maker Remy Cointreau and Louis Vuitton owner LVMH were also excluded and the euro zone blue-chip index gained 0.4%.

"The reaction this morning is just muted because you had two big days of selloff," said Claudia Panseri, a strategist at UBS.

"For the time being, the total amount (of the tariffs) at this stage is very small. I don't think there will be retaliation. U.S.-China trade (tensions) definitely has more of an impact."

The broader pan-European STOXX 600 index edged 0.1% higher, with the food & beverage sector leading gains with a 0.9% rise.

Growth worries continue to dog markets. Data on Thursday showed euro zone business growth stalled in September, suggesting that a contraction in manufacturing activity was increasingly spilling over to the services industry.

A prolonged tit-for-tat trade war between Washington and Beijing and worsening outlook for a quarterly earnings season that is just getting underway has hurt European sentiment after a bullish September.

Ted Baker Plc plunged 35% after the British fashion retailer reported a first-half pretax loss and warned of the worst business conditions for retailers in 30 years.

H&M shares, however, jumped 7.0% after the world's second-biggest fashion retailer reported its first quarterly rise in pretax profit in over two years. That helped the retail index gain 0.3%.

The Frankfurt Stock Exchange will remain shut on Thursday for the Day of German Unity public holiday. (Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Bernard Orr and Patrick Graham)