ASML paints optimistic earnings picture to boost European shares

* FTSEurofirst 300 up 0.3 pct

* ASML reiterates optimistic outlook after earnings beat

* ABB (NYSE: ABB - news) suffers after profit warning

* Intesa, Enel (Milan: ENEL.MI - news) benefit from Barclays (LSE: BARC.L - news) upgrades

By Alistair Smout

LONDON, Jan 22 (Reuters) - European shares rose on Wednesday, buoyed by above expectation results from Dutch technology firm ASML that helped to raise optimism over the nascent European earnings season.

ASML, regarded as a barometer for the health of Europe's technology sector, surged 5 percent after it beat forecasts for its fourth-quarter results and reiterated its upbeat outlook for first-half sales.

While only 8 percent of STOXX Europe has reported earnings so far, 68 percent of those that have posted results have beaten or met expectations for yearly earnings.

"Although the proof will be in the pudding, the expectation is for European earnings to shine, with a likelihood of more surprises than disappointments," Darren Sinden, trader at Titan (Shenzhen: 002531.SZ - news) Investment Partners, said.

However, Swiss engineer ABB fell 3.8 percent after it flagged that its power division would miss quarterly profit targets after $260 million in charges due to project delays and restructuring costs.

"Whilst a $260 million hit for ABB is not that palatable in a quarter, in the grand scheme of things its not that material, particularly if it is just a one off restructuring charge," Sinden said.

"Overall I would expect Industrials to do well over the medium term."

By 0828 GMT, the pan-European FTSEurofirst was up 0.3 percent at 1,349.55, just shy of a fresh multi-year high touched during Tuesday's trade at 1,353.47.

The index is up 2.5 percent this year, having broken out of a tight ten point range a week ago.

Supporting gains were a number of companies that benefited from target price upgrades from banks, with Italian utility Enel (MDD: ENEL.MDD - news) and bank Intesa San Paolo gaining 2.4 percent and 1.7 percent respectively after both received upgrades from Barclays.

Enel is upgraded to "buy" from "neutral" by the bank, which says that negativity still surrounds the firm, which still looks like good value despite a 9 percent gain so far this year.

"We believe this year (Enel) can change the negative perception that the market still has in relation to the company's generation of FCF (free cash flow) and de-leverage prospects," analysts at Barclays said in a note.

"Despite the good run, the stock still appears cheap."

Today's European research round-up

Asset returns in 2013: