European shares hold steady, airlines climb as oil price slides

* FTSEurofirst 300 up 0.03 pct, halts 3-week pull-back

* DAX hits most "oversold" level in three years

* Sell-off is buying opportunity - ClearBridge's Bauman

* Luxottica (Milan: LUX.MI - news) shares tumble as new CEO set to leave

By Blaise Robinson

PARIS, Oct 13 (Reuters) - European stocks held steady on Monday, breaking their three-week slide as shares in airlines rebounded on cheaper oil prices that lower their operating costs.

Shares (Berlin: DI6.BE - news) in German lender Commerzbank (Xetra: CBK100 - news) rose 2.3 percent after sources told Reuters preliminary talks with the European Central Bank have given the bank no reason to believe its capital will fall below stress test requirements.

Air France-KLM (Other OTC: AFLYY - news) gained 1.9 percent and Lufthansa climbed 1.6 percent as Brent crude sank below $88 a barrel, its lowest level in almost four years, after major Middle East producers signalled they would keep output high even if that meant lower prices.

Jet fuel, derived from crude, accounts for around a third of airline operating costs, so the recent oil price drop - Brent is down nearly 25 percent since mid-June - should be a boon for the sector's earnings.

"The sell-off in global stocks and crude prices has clearly been flow-driven, and such a move brings good buying opportunities for long-term investors like us," said Evan Bauman, portfolio manager at ClearBridge Investments, which has $36 billion in assets under management.

"We've been holding cash in the past few months, about 13-14 percent of the portfolio, expecting a pull-back. With the market's recent retreat, we've been putting a bit of this money back to work."

At 1421 GMT, the FTSEurofirst 300 index of top European shares was up 0.03 percent at 1,293.29 points.

The index has lost about 8 percent since mid-September, mirroring a sharp pull-back in global equity markets fuelled by uncertainty about the timing of the U.S. Federal Reserve's first interest rate hike and revenue warnings from a number of U.S. and European companies, as well as deteriorating macro data from Germany, Europe's biggest economy.

Around Europe, the UK's FTSE 100 index has retreated about 8.8 percent in the latest pull-back over the last three weeks, Germany's DAX index has lost 12 percent and France's CAC 40 has dropped 11 percent.

Technical charts show most European indexes in "oversold" territory, with their 14-day relative strength indexes (RSI) below 30. The RSI for Germany's DAX has dropped to 22.07, the lowest level since August 2011, representing its most "oversold" level in more than three years.

Recently hammered mining stocks rebounded on Monday along with metal prices such as copper after better-than-expected Chinese trade data eased worries of a slowdown in demand in the top commodities consumer.

Rio Tinto (Xetra: 855018 - news) was up 3.8 percent and BHP Billiton (NYSE: BBL - news) up 2.7 percent.

Shares in Fiat Chrysler Automobiles were up 3.1 percent in Milan and up 4.6 percent in New York as the group made its Wall Street debut to great fanfare, shifting the carmaker's centre of gravity away from Italy.

Vienna Airport jumped 18 percent after the group said Australia's IFM Investors plans to buy a stake of up to 29.9 percent in the group.

Italian eyewear group Luxottica sank 8.9 percent after the company said its new chief executive, Enrico Cavatorta, was set to leave after just six weeks in the job.

Another heavy faller was STMicroelectronics (Milan: STM.MI - news) , which slipped 3.9 percent after rating downgrades from both Morgan Stanley and JPMorgan in the wake of a revenue warning from U.S. tech firm Microchip.

Shares in Pershing Square, a fund run by U.S. activist investor Bill Ackman, were down 7.9 percent on their debut on Monday on the Euronext Amsterdam exchange. The shares were initially priced at $25, giving the fund a market capitalisation of $6.2 billion. It was trading at $23.03 in the afternoon.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (Aditional reporting by Sudip Kar-Gupta and Alexandre Boksenbaum-Granier; Editing by Hugh Lawson)