News: RIO Retail stocks power European shares for fifth day

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April 16 (Reuters) - European shares rose on Tuesday as Zalando's upbeat results boosted the retail sector and data out of China added to hopes of stabilization in the world's second-largest economy.

The pan-European STOXX 600 index .STOXX gained 0.3 percent by 0735 GMT, up for the fifth day with most bourses in the region higher and Germany's DAX .GDAXI leading gains.

Zalando ZALG.DE jumped more than 10 percent, making it the top performer on the STOXX and DAX, after the e-commerce company said it expected to post an operating profit for the first quarter.

Steel pipe maker Tenaris TENR.MI also led gains on the pan-region index after an Argentine court reversed a decision against the company's chief executive and chairman.

Italy's top bank, UniCredit SpA CRDI.MI , gained after the lender and two subsidiaries agreed to pay $1.3 billion to U.S. authorities to settle probes of violations of U.S. sanctions on Iran and other countries.

Security company G4S GFS.L rose 1 percent after it reported a 4.8 percent rise in first-quarter revenue and said it had made good progress in a review to separate its cash business.

Italian utility Ascopiave ASCI.MI rose after A2A A2.MI and other utilities made a joint non-binding bid for its assets.

At the other end of the index, Lufthansa LHAG.DE dropped 2 percent after Germany's biggest airline posted a loss in the first-quarter hurt by rising fuel costs and overcapacity in Europe.

Both Ryanair Holdings RYA.I and Air France KLM SA AIRF.PA lost more than 1 percent each.

Hays Plc HAYS.L tumbled 6.2 percent as the British recruitment firm's organic growth slowed in Australia and Germany in third quarter.

Oil stocks including BP BP.L , Total TOTF.PA and Royal Dutch Shell RDSa.L were the biggest weights on the STOXX 600, tracking declining crude prices.

Investors breathed a sigh of relief last week after central banks in the United States and Europe maintained their dovish stance and Britain lawmakers got an extension on their country's exit from the European Union.

Signs that Sino-China trade talks are in their final stages have aided the recent buoyant mood. Closer to home, the European Trade Commissioner said late Monday that the European Union is ready to start talks on a trade agreement with the United States and aims to conclude a deal before the end of the year.

The index of STOXX 50 volatility .V2TX , the main gauge of market anxiety in Europe, has fallen in the past five sessions to its lowest in nearly nine months.