* France's CAC down 0.4 pct, lags Europe
* Software AG top gainer after results
* European earnings kick off in earnest next week (Adds details, updates prices)
By Kit Rees
LONDON, April 21 (Reuters) - French blue-chip stocks underperformed other European benchmark indexes on Friday as investors retreated from risky bets ahead of the too-close-to-call first round of France's presidential election.
The CAC fell 0.4 percent, while the pan-European STOXX index added 0.1 percent. On the week they were down slightly but both indexes are less than 2 percent below their highest level this year hit last week.
"So far markets have been pretty sanguine in the face of the (French) presidential election, which was flagged as one of the potential banana skins for markets in this year," Hargreaves Lansdown senior analyst, Laith Khalaf, said.
"There may be a bit of political weariness among investors, but also they may just be thinking that, actually, they’re not going to place market bets based on political events, and that would be an entirely sensible strategy," he said.
Among French standout movers, Danone was the biggest faller on the CAC 40, down 2.5 percent after reporting first-quarter sales figures.
French banks Societe Generale and BNP Paribas extended the previous session's gains, rising 1.7 percent and 2.2 percent respectively.
Banking stocks, which are seen as benefiting from the victory of a mainstream candidate in the French vote, were the biggest sectoral gainers in Europe, up 0.7 percent, while basic resources stocks ended flat after gaining initially on the back of slight gains in copper prices.
Earnings and deal-making drove stock price moves elsewhere, including a jump of 7.9 percent for Software AG, making the shares the STOXX 600's top gainer, after reporting first-quarter results. Software's quarterly core profit declined less than expected.
Tech sector peer ASM International rose 3.7 percent after Natixis raised its target price.
Europe's earnings season kicks off in earnest next week with Credit Suisse, UBS and SAP among those reporting results.
European first quarter earnings are expected to increase 7.2 percent from the first quarter of 2016, according to Thomson Reuters I/B/E/S data. Excluding the energy sector, this would be a rise of 2.9 percent.
Engineering firm WS Atkins gained 6.1 percent after Canada's SNC-Lavalin Group said it would buy the firm for C$3.6 billion, firming up this month's indicative offer.
Among other standouts, Orkla fell 3.2 percent after going ex-dividend, while a downgrade from Panmure weighed on SSP Group's shares.
Oil stocks were a drag, falling 0.8 percent as crude prices retreated. (Additional reporting by Danilo Masoni; Editing by Jeremy Gaunt)