European shares hit one-month high on upbeat earnings, rate-cut optimism

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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.

(Reporting by Ankika Biswas in Bengaluru; Editing by Sherry Jacob-Phillips)