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LONDON, Oct 16 Reuters Analysts have downgraded estimates for European corporate earnings at the fastest pace in seven months this week, setting a lower bar for beats, while more optimism over the global outlook might spare shares from severe punishment for misses.

Thirdquarter earnings are expected on average to have increased 3.7 from a year ago, according to data from LSEG IBES, driven by growth in materials, financials, and utilities.

However, the ratio of downgrades to upgrades of analysts39; European earnings estimates has reached its highest since February as the region39;s economy struggles to generate meaningful growth.

Expectations have come down quite a bit, particularly with the economy weakening, said Frederique Carrier, head of investment strategy at RBC Wealth Management.

If numbers are better than expected, I would expect the market to react quite positively, Carrier said.

Quarterly results from European giants French luxury groups LVMH on Tuesday and rival Christian Dior on Wednesday push thirdquarter earnings season into high gear this week.

In the second quarter, earnings misses were punished more than they had been historically. However, some analysts believe this quarter might be different, as investors turn more optimistic about the…