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* German inflation confirmed at 2.5% in June

* U.S. CPI at 1230 GMT

* Galp shares down after MS cuts to 'underweight'

* DNB up after Q2 beat on higher fees

* Ambu jumps after it hikes outlook, reports Q3 beat

* STOXX 600 up 0.5%

July 11 (Reuters) - European shares extended their gains on Thursday as more upbeat earning updates rolled in, although the focus is on U.S. inflation data for cues on the timing of the Federal Reserve's first interest rate cut.

The pan-European STOXX 600 index climbed 0.5% by 0817 GMT, led by gains in the construction and materials sector . Oil and gas was the only sector trading the red with a marginal decline.

London's FTSE 100 climbed 0.2% as data showed Britain's economy grew more quickly than expected in May, although that added to doubts about the possibility of the Bank of England lowering rates next month.

Outperforming their European peers, French stocks rose 0.6%, led by media group Vivendi's 3% surge after JP Morgan placed the stock on its "positive catalyst watch".

All eyes will now be on U.S. consumer prices data at 1230 GMT (08:30 a.m. ET), which is expected to show headline inflation moderated to 3.1% in June from 3.3% the previous month.

"Figures in line, or ideally softer-than-expected - if also combined with soft weekly jobless claims - should keep the Fed doves in charge of the market, further boost appetite for bonds, pressure yields and the U.S. dollar to the downside and give further support to the equities rally," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Money markets have priced in a 73% chance of a U.S. rate cut in September.

Meanwhile, German inflation eased to 2.5% in June, confirming preliminary data and leaving the door open for another European Central Bank rate cut in September.

Among stocks, British water company Pennon rose 6.8% after it named company insider Laura Flowerdew as its new CFO as current finance boss Steve Buck is leaving the firm for personal reasons.

DNB, Norway's largest bank, surged 6.0% after it reported higher-than-expected second-quarter earnings and said its results were supported by a stable economy.

Ambu's shares jumped 6.3% to their highest since February 2022 after the Danish medical equipment maker hiked its full-year outlook and its preliminary third-quarter numbers beat consensus.

Barry Callebaut slipped 10.4% to the bottom of the STOXX 600 even as the Swiss chocolate maker reported slightly higher sales volumes for the nine months ended May, despite surging cocoa prices pressuring demand.

Portugal's Galp Energia slipped 4.4% after Morgan Stanley downgraded its rating on the stock to "underweight". (Reporting by Shubham Batra in Bengaluru; Editing by Savio D'Souza)