European shares edge higher, focus on Yellen

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* STOXX Europe 600 index up 0.2 pct

* Miners gain, financials down

* Focus on Yellen's speech

By Atul Prakash

LONDON, Nov 17 (Reuters) - European equities edged higher on Thursday as basic resources stocks bounced back, while South African financial services group Investec (LSE: INVP.L - news) climbed to a six-month high after reporting a jump in half-year profits.

Investec rose 4.2 percent, the top gainer in the STOXX 600 index, after reporting a 20 percent rise in half-year profit, buoyed by a strong showing at its asset management and wealth arms.

The pan-European STOXX 600 was up 0.2 percent by 0942 GMT after opening lower. The index is still down around 7 percent so far this year.

Investors also awaited U.S. Federal Reserve Chair Janet Yellen's congressional testimony at 1500 GMT for cues on the economic outlook and rate increases.

"Despite the remarkable sell-off in the U.S. bond markets and the rising inflation expectations, Janet Yellen is expected to sound cautious and to refrain from giving too much credit to recent turbulences in the financial markets," Ipek Ozkardeskaya, analyst at London Capital Group, said.

"This is the major downside risk in the U.S. and global equity markets today."

The STOXX Europe 600 Basic Resources (Frankfurt: W8Z.F - news) index rose more than 1 percent on expectations that metals prices would remain supported following a pledge by U.S. President-elect Donald Trump to invest heavily in infrastructure projects.

Anglo American (LSE: AAL.L - news) , Rio Tinto (LSE: RIO.L - news) , BHP Billiton (NYSE: BBL - news) and Antofagasta (Other OTC: ANFGF - news) were up 1.1 to 2.2 percent.

However, gains in miners were capped by losses in banks.

The European banking index fell 0.7 percent, the worst sectoral performer, as some investors took profits after recent strong gains.

However, the beaten-down sector, which is still down nearly 14 percent so far this year despite a rally of more than 30 percent since a low in July, is firmly back on the radar as a spike in bond yields on the back of improved growth expectations has brightened the case for bank profits.

Shares (Berlin: DI6.BE - news) in Credit Agricole (Swiss: ACA.SW - news) , ABN Amro and Royal Bank of Scotland (LSE: RBS.L - news) fell 1.2 to 2.0 percent.

UniCredit (EUREX: DE000A163206.EX - news) dropped 3.5 percent after Il Sole 24 Ore reported that the Italian bank was considering making provisions to the tune of 7-8 billion euros to clean up non-performing loans.

Among other sharp movers, an earnings miss at Ahold Delhaize (LSE: 0QS2.L - news) put it on course for its worst day in seven months. The U.S.-European supermarket operator was last quoted around 3 percent lower after missing expectations for third-quarter results due to weakness at its U.S. grocery chains.

Britain's Royal Mail (LSE: RMG.L - news) slumped nearly 5 percent, the worst performer in both the pan-European STOXX 600 and Britain's blue-chip FTSE 100, after posting a 5 percent fall in first-half profit.

"The decline is in line with company expectations but it's still painful," Hargreaves Lansdown (LSE: HL.L - news) analyst Nicholas Hyett said. (Reporting by Atul Prakash; editing by Mark Heinrich)