(Corrects paragraph 8 on Ryanair results with up-to-date news)
* Pan-European STOXX index up 1.4 pct
* Results boost shares in HSBC, Ryanair
* PostNL rallies after rejecting improved bid
* UBS downgrade pressures Zalando
By Danilo Masoni
MILAN, Nov 7 (Reuters) - European shares rallied on Monday, underpinned by stronger banking stocks, as news that Hillary Clinton would not face charges over her use of emails gave her bid for the White House fresh momentum just before the Nov. 8 vote.
By 0922 GMT, the STOXX 600 was up 1.4 percent. Last week the pan-European index made its biggest weekly loss since February on growing uncertainty over the U.S. vote’s outcome.
But Clinton got a fresh boost over Republican rival Donald Trump after the FBI said on Sunday it stood by its earlier finding that no criminal charges were warranted.
“With this result being seen as a positive for her chances of winning tomorrow’s election, the market has opened with a risk-on tone,” Rabobank analysts wrote in a note.
While no sector was trading in the red, banks led the gainers, helped by a more than 4 percent surge in HSBC . The emerging markets-focused bank had posted a sharp jump in its core capital, bolstering the outlook for near-term dividend payments.
“The key feature of the numbers is the reported CT1 (core tier 1 ratio) of 13.9 percent and leverage ratio of 5.4 percent, substantially ahead of expectations and management’s target,” said UBS, which rates the stock as “neutral”.
Italy’s Intesa, BNP Paribas and Deutsche Bank rose between 2.6 percent and 3.4 percent. Analysts had said banks would suffer in particular by any policy uncertainty created by a Trump presidency.
Ryanair, up 5.6 percent, was another gainer after a well-received earnings update. Europe’s largest carrier by passengers lifted its long-term growth forecast by 10 percent and said it would return an additional 550 million euros to shareholders by February.
The top STOXX gainer was PostNL, gaining 5.8 percent, after the Dutch postal company rebuffed a raised takeover offer from Belgian rival Bpost, saying it wished to remain an independent group.
Among top losers were Zalando, which fell more than 2 percent following a two-notch downgraded to “sell” from UBS, and precious metals miners Fresnillo and Randgold , which were supported last week as investors sought safe haven assets due to concerns over the U.S. vote’s outcome.
Analysts at Deutsche Bank said a Clinton victory could lift Europe’s STOXX index by around 5 percent, while uncertainty linked to a Trump win could see it fall 5-10 percent. (Reporting by Danilo Masoni; Editing by Andrew Heavens)