* STOXX 600 up 0.1 pct
* Italy index recoups post-election vote losses
* Activist investor Elliott builds stake in Telecom Italia
* Smurfit Kappa rejects bid, shares jump
* Earnings updates hammer Just Eat, Aggreko (Adds closing prices)
By Kit Rees
LONDON, March 6 (Reuters) - European shares bounced off six-month lows on Tuesday as the focus shifted from politics to dealmaking and earnings, with paper and packaging stocks soaring after Smurfit Kappa rejected a bid approach.
Telecom Italia jumped 5.9 percent after activist investor Elliott confirmed it had built a stake in a bid to improve governance and strategy at the company.
The move could challenge the way top shareholder Vivendi is managing the company.
The pan-European STOXX 600 index ended up 0.1 percent, coming off earlier highs following a late drop on Wall Street, while Italy's benchmark recouped all of its losses from the previous session, up 1.8 percent, as concerns over political uncertainty following an inconclusive election result eased.
"Italy is going to be so ... tied up for months that in a way it's almost a blessing because there will not be any ability to do anything unconventional. In a way that is quite comforting for the market," Ken Odeluga, market analyst at City Index said.
"(Italy seems) to have a knack for pulling out a political solution which the markets can live with and that's happened time and time again."
Fiat Chrysler rose 5.7 percent following a source-based Reuters report saying the Italian-American carmaker was looking to spin off auto-parts business Magneti Marelli to its shareholders.
German autos Volkswagen, Daimler and BMW - hit earlier this week by concerns over a trade war after U.S. President Donald Trump proposed imposing tariffs on steel and aluminium - also rose.
Those worries have dissipated slightly as Trump faces a growing pushback from political and diplomatic allies as well as U.S. companies.
Their gains helped European autos rise 1.2 percent.
Paper and packaging maker Smurfit Kappa jumped 18 percent after rejecting an approach from International Paper . Peers DS Smith and Mondi rose 5.6 and 2.3 percent respectively.
"With a coordinated global fight against the use of plastics, the sector could well be ripe for consolidation," said Mike van Dulken, head of research at Accendo Markets.
A number of stocks sustained heavy losses after giving earnings updates.
Just Eat slumped 12.6 percent after saying that a planned increase in spending in 2018 would hit core earnings.
Aggreko, a temporary power provider, fell 3.9 percent after reporting an 11.8 percent fall in full-year profit. Likewise Swiss security firm Dormakaba fell 5.8 percent after its half year results, in which it forecast slower organic sales growth.
Reporting by Kit Rees; additional reporting by Danilo Masoni; Editing by Catherine Evans and Andrew Heavens