• Kingfisher jumps after raising bottom-end of profit forecast
• Barry Callebaut rises after Barclays sweetens ratings
• STOXX 600 up 0.5%

Sept 17 (Reuters) - European stocks hit a two-week high on Tuesday, supported by financials, as markets drew closer to an expected start to the U.S. Federal Reserve's monetary easing cycle that could see policymakers deliver an outsized interest rate reduction.

The continent-wide STOXX 600 index (.STOXX) , opens new tab was up 0.5% at 517.74 points, and Britain's FTSE 100 (.FTSE) , opens new tab outperformed its European peers with a 0.7% jump.

All sectors were trading higher, led by a nearly 1% gain in basic resources (.SXPP) , opens new tab, as greenback-priced copper edged higher due to a softer dollar and expectations of a U.S. rate cut.

Banks (.SX7P) , opens new tab and travel shares (.SXTP) , opens new tab also boosted the markets, rising 0.8% each.

Investors will be squarely focused on Fed's decision on Wednesday, with markets now pricing in a 67% chance that the U.S. central bank could ease rates by 50 basis points.

"I think there is some volatility and nervousness in the market about the growth environment, maybe about politics. But overall indeed about the central banks decisions," said Yvan Mamalet, senior economic strategist at SG Kleinwort Hambros.

"I don't think it's only the Fed. I think the Bank of Japan decision at the end of the week - the communication is also leading to the uncertainty and maybe to the nervousness as well."

Markets will closely monitor German sentiment survey at 0900 GMT that is expected to show a slight deterioration in September, and U.S. retail sales, due at 1230 GMT, are forecast to have contracted in August on a monthly basis.

European Central Bank's supervisor Claudia Buch and board members Elizabeth McCaul and Frank Elderson will be speaking later in the day.

Among stocks, Kingfisher (KGF.L) , opens new tab was the top gainer, rising 7.1% after the European home improvement retailer raised the bottom-end of its profit outlook for the full year.

Shares of Barry Callebaut (BARN.S) , opens new tab climbed 7% after Barclays raised the stock's rating to "overweight" from "underweight".

Sweden's Thule Group (THULE.ST) , opens new tab slipped 6.7% to the bottom of STOXX 600 as its second-quarter revenue fell and its debt rose.

Playtech (PTEC.L) , opens new tab slid 2.3% after the British gambling technology firm agreed to sell its Italian unit Snaitech for 2.3 billion euros ($2.56 billion), including debt, to the world's largest betting company Flutter Entertainment (FLTRF.L) , opens new tab.

Shares of Flutter were up 0.8%.

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https://www.reuters.com/markets/europe/european-shares-advance-lead-up-fed-rate-decision-2024-09-17/