* STOXX 600 index up 0.4 pct
* Credit Agricole leads banks after results
* Earnings boost Huhtamaki, Heineken (Adds detail and quotes, updates prices)
By Kit Rees
LONDON, Feb 15 (Reuters) - European shares rose on Wednesday in another session dominated by earnings, as French lender Credit Agricole led banking stocks to a three-week high.
The pan-European STOXX 600 index was up 0.4 percent with the banking index the top sector, up 1.7 percent.
Shares in Credit Agricole jumped 5.5 percent, set for their best day since early November, after France’s biggest retail bank beat forecasts with a smaller than expected earnings drop in the fourth quarter.
The reaction was particularly positive to results from Credit Agricole’s French retail bank unit LCL, which analysts at Jefferies said had been an ongoing concern for some investors.”
“(Credit Agricole) remains one of our favourite names in France. However, we are aware that political uncertainties could weigh on the performance of the French financials until May,” they said in a note.
Banking stocks were also helped by hawkish rhetoric from U.S. Federal Reserve Chair Janet Yellen, who said on Tuesday that the Federal Reserve will likely need to raise interest rates at an upcoming meeting. Low interest rates put pressure on banks’ margins, as has been the case in Europe.
Some analysts were cautious on the move higher as banks looked set to post their third session of straight gains.
“There does not seem to be yet the environment that would actually bring about the sustained improvement in the European banks on the interest rate side, on the operational side, on the conduct side,” Ken Odeluga, market analyst at City Index, said, adding that he expected the rally to fade.
Earnings also helped more broadly, with Finnish packaging maker Huhtamaki rising more than 8 percent after reporting results, the top gainer on the STOXX 600 index.
Brewer Heineken rallied 4.4 percent after confirming its margin target.
Among the biggest fallers, travel firm TUI was down 5.8 percent, giving up all of its gains from the previous session when it reported results.
Swiss software provider Temenos dropped more than 5 percent after reporting results and announcing a proposal to acquire Australia’s Rubik Financial.
“While management seemed confident on visibility, the business is lumpy,” analysts at UBS said in a note, adding that they were sticking with their “sell” rating on the stock.
Insurer Ageas, medical equipment firm Gerresheimer and paints and coatings company Akzo Nobel were also all weaker after reporting results. (Reporting by Kit Rees; Editing by Toby Chopra and John Stonestreet)