European shares turn higher as investors shrug off poor earnings

* FTSEurofirst 300 index up 0.4 percent

* Pearson (Xetra: 858266 - news) shares slump after profit warning

* Credit Suisse (LSE: 0QP5.L - news) slips on results, capital hike plans

* Technology top sectoral gainer, led by ARM

By Danilo Masoni and Atul Prakash

MILAN/LONDON, Oct (HKSE: 3366-OL.HK - news) 21 (Reuters) - European shares pared losses to turn slightly higher on Wednesday as confidence over a positive close to the year and continued central bank support helped investors absorb weak earnings news.

The pan-European FTSEurofirst 300 index was up 0.4 percent after falling 0.5 percent in the previous session, while the euro zone's blue-chip Euro STOXX 50 index climbed 0.7 percent.

Among standout losers, Pearson shares sank 16 percent after the firm said it expected earnings to be at the bottom end of its forecast range due to lower enrolments at some colleges in the United States and fewer school text book purchases in parts of South Africa.

Gains were helped by a positive close for Tokyo overnight where sentiment was helped by growing expectations the Bank of Japan may undertake further easing. Investors were also focusing on the European Central Bank's (ECB) meeting on Thursday.

"We are moving in the right direction and I expect (ECB President Mario) Draghi to be supportive," one Italian fund manager said.

"In spite of the profit warnings the market is attempting to recover and this is a good sign which, combined with low rates, QE (quantitative easing) and a stabilisation of China, might allow the market to end the year in positive territory".

Gains in Europe were led by a rise of more than 1 percent in technology, construction and energy sectors.

Among individual gainers, ARM Holdings (LSE: ARM.L - news) surged 7.8 percent after the British chip designer, whose technology powers the iPhone, met expectations with a 27-percent rise in third-quarter profit.

Bucking the trend, Swedish banks fell after missing third-quarter earnings expectations, with SEB (Other OTC: SEBYF - news) , Nordea and Handelsbanken all down 2.3 to 5.3 percent. The banks saw operating earnings fall against a backdrop of negative interest rates and a slowdown in Chinese growth that has roiled financial markets.

Credit Suisse fell 2 percent, paring losses, after announcing plans for capital hikes to raise about 6 billion Swiss francs. The bank, which also reported a 24-percent drop in third-quarter net profits, plans to reduce the number of its staff in Switzerland by a net 1,600 in three years and cut the number of its investment bank staff in London.

Analysts said the market's direction was likely to be dictated by company results in the coming days as Europe's quarterly earnings season gathers pace.

Only 6 percent of 284 companies in the STOXX Europe 600 index have reported quarterly results so far, of which 69 percent have met or beaten forecasts, according to Thomson Reuters StarMine.

In the United States, 13 percent of companies in the S&P 500 index have announced results, with 74 percent firms meeting or beating expectations and the rest missing forecasts.

Portugal's benchmark share index, down 0.6 percent, underperformed other major indexes due to political uncertainty.

Today's European research round-up (Editing by Louise Ireland)