By Shreyashi Sanyal and Ankika Biswas

(Reuters) -European shares gained on Tuesday, starting November on an upbeat note amid growing hopes that the U.S. Federal Reserve would slow down the pace of its interest rate hikes.

The pan-European STOXX 600 index rose 0.6% to hit a near seven-week closing high, with miners and retailers leading the gains.

Investors expect the U.S. central bank to raise its interest rates by 75 basis points on Wednesday, but hopes remain the central bank will deliver a smaller 50-bp increase in December.

All eyes are on the Fed, so I am expecting markets to cage up today … If the Fed surprises with a more dovish stance, I’m expecting a strong move higher in risk assets and the dollar to move much lower,” said Giles Coghlan, chief market analyst at HYCM.

A better-than-expected earnings season has recently helped pull the STOXX 600 higher, but worries remain about the euro zone slipping into a recession as the European Central Bank promised more monetary policy tightening to combat record high inflation.

Further, rumours based on an unverified note circulating on social media that China was planning a reopening from strict COVID curbs in March triggered a rush to luxury names, which have major exposure to China.

Luxury giants including LVMH, Kering, Pernod Ricard and Hermes International advanced between 1.9% and 3.0%.

Miners leapt 3.4%, while oil & gas stocks added 1.7%, as prices of oil and industrial metals rose against a weak dollar. [O/R] [MET/L]

There are social media reports on China easing its zero-COVID policy and look at how much relief it has brought to markets starved for some good news out of China,” Coghlan added.

The earnings season has also been largely supportive for markets. Out of the 163 STOXX 600 companies that have reported results so far, 58.3% exceeded analyst estimates, Refintiv data showed. In a typical quarter, 53% companies beat estimates.

Prosus NV jumped 9.3% after the technology investment firm denied a press report on a potential sale of its 28% stake in Chinese software and gaming giant Tencent.

Italy’s Monte dei Paschi di Siena rose 4.9% as it said its up to 2.5 billion euro ($2.5 billion) capital increase had been 93% covered so far.

Dutch specialty chemicals maker DSM dropped 4.0% as it lowered its 2022 profit outlook.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Subhranshu Sahu and David Evans)