* FTSEurofirst 300 index gains 0.3 percent
By Atul Prakash
LONDON, May 7 (Reuters) - European shares edged higher on Wednesday, with strong earnings reports from some companies and encouraging U.S. mortgage data helping lift the market.
The FTSEurofirst 300 index of top European shares was up 0.3 percent at 1,346.80 points by 1216 GMT after falling earlier to 1,337.75, the lowest since late April.
European equities were helped by encouraging results, with Credit Agricole, France's third-biggest listed bank, rising 5.4 percent to top the FTSEurofirst 300 leader board after it reported a 30 percent rise in quarterly net income.
The market also got some support after the Mortgage Bankers Association said its seasonally adjusted U.S. index of mortgage application activity rose 5.3 percent in the week ended May 2.
"Any data showing an improvement in the U.S. housing market is positive for the equity market," said Koen De Leus, senior economist at KBC in Brussels.
"And the market could get further support if the current reporting season indicates that company profits are rising. It would also help valuations to look attractive again. First indications in Europe, however, point to a limited rise in profits."
But gains in the wider markets were capped by sharp drops in shares of some companies.
Fiat Chrysler fell 7.5 percent, the biggest faller on the FTSEurofirst 300, as analysts expressed scepticism over a plan to boost sales by 60 percent by 2018 and almost wipe out its debt.
Societe Generale (Paris: FR0000130809 - news) fell 0.6 percent after booking a 525 million euro writedown on the value of its Russian unit, blaming heightened uncertainty and a fall in the rouble. Carlsberg (Other OTC: CABGY - news) fell 0.5 percent after reporting a weaker-than-expected first quarter, capped by a weak rouble and falling sales in Eastern Europe.
Lingering geopolitical tensions have prompted investors to trade cautiously. The European Union and Japan called on Russia on Wednesday to avoid worsening the crisis in Ukraine and Brussels threatened further sanctions.
"While the Ukrainian crisis has forced many investors and traders to rethink their short to mid-term investment strategy, with some of them putting their stock buying plans on hold for now, very few at this stage see the need to actually liquidate their portfolios in a major way," Markus Huber, senior sales trader at Peregrine & Black, said.
Europe bourses in 2014: http://link.reuters.com/pap87v
Asset performance in 2014: http://link.reuters.com/gap87v
Today's European research round-up (Editing by Hugh Lawson)