Periphery lags as European shares post small gains ahead of Fed

* FTSEurofirst 300 up 0.2 pct

* BBVA leads euro zone bank selloff after result miss

* Traders say investors more cautious after AQR

* Fugro (Xetra: A0ET3V - news) tumbles 26 pct after cancelling payout

By Francesco Canepa

LONDON, Oct 29 (Reuters) - Southern European shares lagged

small gains in pan-European indexes on Wednesday as weak results

from heavyweight bank BBVA offset optimism ahead of a

Federal Reserve's policy announcement.

Spanish bank BBVA fell 4.1 percent as it reported

a lower-than-expected net profit for the first nine months of

the year and the pace of an ongoing turnaround at the lender

disappointed analysts and investors.

The stock was the biggest drag on Euro STOXX banking index

, which fell 3.1 percent and took its fall since the

publication of the European Central Bank's stress tests over the

weekend to 4 percent.

Investors had generally been expecting the health checks'

publication to restore confidence in some of the weaker lenders

and trigger a rally.

But traders said these bullish bets had been unraveling as

the tests highlighted capital holes at some Italian banks, as

well as extra non-performing loans and hidden

losses.

"There were lots of positions held in 'weak' financials, as

the ECB's AQR test results were seen as a trigger for the next

uptick," a trader said. "They were all stopped out."

Shares (Berlin: DI6.BE - news) in Banca Monte dei Paschi (Milan: BMPS.MI - news) di Siena, which

faces a 2.1 billion euro capital shortfall after the stress

test, fell 8.2 percent after trading in the stock was repeatedly

halted. A Thomson Reuters index of Italian banks fell 4.4

percent.

Fiat Chrysler Automobiles (FCA) outperformed a

lacklustre Milan bourse, surging 12.8 percent as it unveiled

plans to list a 10 percent stake in luxury brand Ferrari and

issue $2.5 billion in convertible bonds to help fund the parent

company's turnaround plan.

The broader FTSEurofirst 300 index of top European

shares closed up 0.2 percent at 1,319.34 points, rising for the

fourth of the last seven sessions, albeit in declining volume.

Trading volume on the index was nearly 10 percent lower than

its average for the past month.

Global shares have rebounded during that time after a sharp

pullback, as investors took heart from generally strong

corporate earnings, especially in the United States, and the

prospect of an accommodative stance from Federal Reserve.

The market expects the Fed's Federal Open Market Committee

to announce it will end years of stimulus measures this month

but also send a soothing message by signaling interest rates are

not likely to rise soon.

"The volumes into the rally are waning," Monument Securities

head of sales, Andy Ash, said. "As we approach the FOMC meeting

and the month end, we have catalysts to pivot once again."

RESULTS MIXED

Dutch marine services group Fugro sank 26.6

percent after it warned it would not pay a dividend for 2014 due

to deteriorating markets and price pressure on oil and gas

projects.

The dividend cut, which came hard on the heels of a profit

warning from Italian oil industry services group Saipem (Milan: SPM.MI - news)

on Tuesday, sent shares in sector peer CGG (NYSE: CGG - news)

down 3.4 percent.

Providing some support to the battered energy sector,

investors welcomed oil major Total's decision to

maintain its dividend while pressing ahead with cost cuts after

falling oil prices squeezed its third-quarter profits. The

shares rose 2 percent.

Europe's largest semiconductor company STMicroelectronics

shed 10 percent after posting higher-than-expected

quarterly net profit but saying margins would be flat and

revenue would fall in the final quarter due to a softening

market.

About a third of companies listed on the STOXX Europe 600

benchmark index have reported results so far in the

earnings season, with 67 percent of them meeting or beating

profit forecasts, and 59 percent meeting or beating revenue

forecasts, according to Thomson Reuters Starmine data.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up

(Additional reporting by Blaise Robinson in Paris and Vikram

Subheadar in London; Editing by Tom Heneghan)