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Admiral jumps on Q2 pre-tax profit beat

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British economy grew 0.6%

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STOXX 600 up 0.2%

(Updated at 0830 GMT)

By Pranav Kashyap

Aug 15 (Reuters) - European shares rose on Thursday as

benign inflation data cemented bets of a U.S. rate cut in

September and gains in insurer Admiral added to the upbeat mood.

The pan-European STOXX 600 had risen 0.2% to trade

near a two-week high and was on track for a third straight

session of gains.

The insurance sector rose 0.5%, boosted by a 6.7%

rise in Admiral after the British motor and home

insurer posted a better-than-expected 32% jump in first-half

pre-tax profit.

Mild U.S. inflation readings this week have cemented hopes

that the Federal Reserve will lower borrowing costs in September

for the first time in 4-1/2 years.

Traders are now split on whether policymakers will opt for a

super-sized 50-basis-point reduction or a normal 25 bps cut.

"We're going to get probably a 25 bps cut because that is

how central banks have always worked. However, if they deliver a

50 bps cut - it has huge merit and can avert a recession,"

Manish Singh, chief investment officer at Crossbridge Capital

said.

The 'fear gauge', the Euro STOXX volatility index,

returned to levels seen before the market's risk-off sentiment

that began in the first week of August.

It hit a low of 15.82 points, dipping below the lows of

August 1 and reflecting a more optimistic and improved investor

mood.

However, a veil of caution still hung in the air, with

investors awaiting the arrival of further economic data,

including the release of U.S. retail sales figures and weekly

jobless claims data at 8:30 a.m. ET (1230 GMT).

The tech sector, one of the most affected during the

early August stock rout, was the top gainer among sectors in the

current session, rising 0.5%.

Meanwhile, data earlier in the day showed that Britain's

economy grew 0.6% in the second quarter, in line with

economists' expectations.

The benchmark FTSE 100 was trading flat.

Among other individual stocks, Adyen gained 6.3%

after the Dutch payments company beat half-year core profit

expectations.

Orsted lost 7.7% after the world's biggest

offshore wind farm developer reported its second-quarter

results.

Geberit fell 3.7% after the Swiss plumbing

materials supplier announced its full-year outlook that was

below analyst expectations.