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May 7 (Reuters) - European shares on Tuesday hit their

highest levels in more than a month as a slew of positive

corporate earnings, including from banks such as Switzerland's

UBS and Italy's UniCredit, added to the upbeat sentiment

surrounding interest rate cuts.

The pan-European STOXX 600 was up 0.6%, as of 0710

GMT, after closing at a one-week high on Monday.

Shares of UBS jumped 6.3% after the lender's

first-quarter net income nearly tripled estimates, while logging

its first quarterly profit since taking over Credit Suisse.

The financial services index climbed 1.8%.

UniCredit, Italy's second-largest bank, gained

nearly 3% as it raised investor reward guidance for the year

after posting a much higher-than-expected net income and further

boosting capital levels.

Infineon advanced 6.5%. The German chip

manufacturer, however, announced a cost-savings programme after

lowering its full-year revenue outlook.

Danish medical equipment maker Coloplast dropped

5.1% after a second-quarter earnings miss.

Also aiding equities were lower euro zone bond yields on

increased bets of rate cuts by the Federal Reserve and European

Central Bank this year following Friday's weak U.S. jobs data.