February 7, 2017 / 5:52 PM / a year ago

Strong earnings boost European shares, but France lags

* Pan-European STOXX 600 index ends up 0.3 pct

* France’s CAC falls 0.5 pct, led by BNP Paribas

* AMS, GEA surge after well-received results

* Q4 earning season delivered solid results so far - DB

* Oil stocks fall after BP misses estimates (Adds details, closing prices)

By Danilo Masoni and Atul Prakash

MILAN/LONDON, Feb 7 (Reuters) - European shares rose on Tuesday, helped by some encouraging company results, but French stocks slipped after earnings at BNP Paribas disappointed and election jitters weighed on the country’s sovereign bonds.

The pan-European STOXX 600 index rose 0.3 percent, partly recovering from losses in the previous session, while the French blue chip CAC index fell 0.5 percent, bringing losses so far this year to more than 2 percent.

French banks, among the best performers among European financials in 2016, fell after BNP reported results below forecasts, while the country’s bond yields spiked on concerns that the far right could win France’s presidential vote and take it out of the European Union.

“The political uncertainty is a burden for financials in France. Some election noise advocating for an exit from the European Union is making investors jittery,” Unicredit analyst Christian Stocker said. “Financials did very well in the last 2-3 months and probably we are seeing some profit-taking now.”

BNP Paribas’ fourth-quarter net income rose to 1.44 billion euros, more than doubling from a year ago, although the result came in below the average estimate of 1.50 billion euros in a poll of analysts. Its shares fell 4.8 percent, making them the biggest losers on the CAC.

EVLI Bank Chief Investment Officer Kim Pessala said relatively cheap valuations and good earnings growth made him quite upbeat about prospects for European equities but political uncertainty and risks of protectionist policies from U.S. President Donald Trump suggested caution.

“We’re leaning towards possibly increasing our exposure to European equities as many things look good, but there are two big uncertainties: Trump and the French elections,” said Pessala.

According to Deutsche Bank, the fourth-quarter season has delivered solid results so far in Europe, with financials and industrials providing the biggest contribution to an overall earnings per share growth of 8.3 percent from a year earlier.

In Tuesday there were well received updates from chipmaker AMS, which rose 22.4 percent, scoring its biggest one-day gain ever, and food-processing machinery maker GEA , which added 3.6 percent after setting a brighter profit outlook.

However updates from energy companies disappointed, with stocks in the sector also penalised by a further decline in crude oil prices.

Oil major BP fell 4.1 percent after the company missed estimates. Peer Statoil also fell 3.1 percent after a disappointing set of results.

Finnish oil refiner Neste fell 5.5 percent after fourth-quarter operating profit came in slightly below consensus forecasts, with some investors also citing disappointment over the lack of clarity in its renewables outlook.

But Kim Gorschelnik, head of research at Finnish asset manager FIM, said the results delivered no new negative surprises, confirming his upbeat view on the stock.

“We consider Neste as a solid quality company for a long term investor and one could consider today’s share price reaction as an entry point,” he said. ($1 = 0.9377 euros) (Reporting by Danilo Masoni; Editing by Mark Trevelyan)

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