Earnings season shows euro zone's gain, FTSE's pain

* Euro zone stocks set for double digit earnings growth in 2015

* Forecasts for FTSE 100 earnings growth slashed

* Euro zone seen resilient despite pressure from falling yuan

By Alistair Smout

LONDON, Aug 12 (Reuters) - Scratch beneath the surface of Europe's bumper earnings season and you will find a yawning divide between a resurgent euro zone, lifted by a domestic recovery, and sputtering UK-listed companies hurt by the commodities slump.

That gap may be exacerbated by the latest bout of market nerves over China's economy, one of the main reasons for the slump in major commodities markets and share prices exposed to that sector, after a foreign-exchange devaluation that has sparked fears of global currency wars.

While the eurozone is not immune to a China slowdown, with German exporters like Volkswagen (Other OTC: VLKAF - news) or Siemens and French luxury goods group LVMH suffering a hit this week, London-listed blue-chips are more exposed to the mining and energy sectors.

So while this year euro zone companies are projected to grow earnings by 13.4 percent, FTSE 100 members are set to see theirs decline by 11.5 percent

"It's euro zone within Europe that is strong, and any weakness is in the FTSE 100," said Patrick Moonen, senior multi-asset strategist at NN Investment Partners.

"We can say with a high degree of confidence that even with the current events in currency markets, euro zone earnings can grow in double digits in 2015."

CONTINENTAL DIVIDE

With most of the earnings season done, 71 percent of Euro STOXX firms have beaten or met revenue expectations, fuelling a 13.7 percent rise in year-on-year earnings.

For each of the last five years, forecasts of double digits earnings growth have evaporated as the year has gone on.

However, predictions of earnings growth of around 12 percent for the Euro STOXX 50 are holding up this year, leaving the index set for its biggest rise in earnings since a 36 percent rise in 2010.

Buoyed by an asset purchase programme by the European Central Bank, funds have been pouring in to European equities as bets build that growth will return to the euro zone economy.

"There's a genuine economic recovery in the euro zone (and) sectors like the banks start to look a little more interesting," said James Barty, head of European equity strategy at Bank of America Merrill Lynch.

The situation on Britain's FTSE 100 is a stark contrast, where companies have posted a 22 percent fall in year-on-year earnings.

The index is set to see earnings slide 11.6 percent this year, with forecasts steadily cut since an oil price rout began in late 2014. At that time, earnings were expected to grow nearly 10 percent in 2015.

Even (Taiwan OTC: 6436.TWO - news) the banks, which are favoured in the euro zone for their domestic exposure, are at risk on the FTSE 100, with HSBC and Standard Chartered (HKSE: 2888.HK - news) having large businesses in Asia.

The pockets of the euro zone stock market affected by the recent moves in China will need to be reassessed, however.

"We've been cutting exposure to exporters since early April," said Dennis Jose, European equity strategist at Barclays (LSE: BARC.L - news) , adding he was rotating into domestic stocks.

JP Morgan equity analyst Prabhav Bhadani said that while exporters had been top performers in the first quarter, a second quarter improvement for domestically exposed stocks meant he was still confident of double digit earnings growth.

"However, it would be difficult to be overweight autos, luxury or industrials, which have a lot of leverage to the China situation," he said.

(Reporting by Alistair Smout; Editing by Keith Weir)