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Chip stocks propel gains in Europe, airlines soar

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Oct 1 (Reuters) - European shares gained on Tuesday, with Apple suppliers leading the charge following a report of strong iPhone sales and a jump in airline stocks after bullish calls from Bank of America Merrill Lynch on the sector.

Semiconductor makers jumped into the spotlight with AMS , Dialog and STMicro posting gains in early trading, pushing the technology sector 1% higher.

Apple Inc's Chief Executive Officer Tim Cook told a German daily that sales of the company's newest iPhones were off to a strong start.

The STOXX 600 index rose 0.3%, with the travel & leisure index up 0.6%.

Air France jumped 2.3% to the top of STOXX 600, after BofA Merrill Lynch initiated coverage on the French carrier with a "buy." The brokerage also set "buy" recommendations for British Airways owner IAG and Wizz Air.

Danish facility services provider ISS was the biggest decliner on the STOXX 600, down 3% after Jefferies downgraded the stock to "hold".

Investors are anxiously waiting for IHS Markit's Purchasing Managers' Index (PMI) data from the euro zone, and will pay close attention to Germany, as the bloc's biggest economy battles a manufacturing recession. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Bernard Orr)