Autos, banks fuel European shares as Italy recovers

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LONDON, May 22 (Reuters) - European shares touched their highest level since the start of February on Tuesday as autos and bank stocks climbed, and Italian shares recovered from Monday's dip on investors' worries over a new government's spending plans.

The pan-European STOXX 600 inched up 0.1 percent, extending Monday's gains, with auto stocks and financials making gains while mining stocks fell.

Asian stocks had wilted overnight as surging oil prices reignited investors' fears of inflationary pressures.

Carmakers Volkswagen, BMW (EUREX: BMWE.EX - news) , Daimler (Swiss: DAI-EUR.SW - news) were among the biggest boosts to the STOXX, up 1 to 1.6 percent, after a Bloomberg report that China would cut import duty on cars to 15 percent from 25 percent.

Italy's Fiat Chrysler also rose 1.2 percent, helping the Italian index gain 0.6 percent. Investors were still awaiting the final details of 5Star and League's government after the anti-establishment parties proposed a political novice as prime minister.

Inmarsat (Other OTC: IMASF - news) shares sank 12.6 percent to the bottom of the STOXX after the International Maritime Organisation authorised competitor Iridium to provide maritime safety systems, threatening Inmarsat's monopoly in maritime distress communications.

Fischer jumped 8.8 percent after UBS (LSE: 0QNR.L - news) raised the stock to a "buy".

Among smaller companies, bicycles to car parts retailer Halfords became the latest in a string of British consumer-facing companies to warn on profits. Its shares fell 13.7 percent to the bottom of the FTSE 250 after warning profits would be flat. (Reporting by Helen Reid, Editing by Kit Rees)