European shares tick up at midday led by financials

* FTSEurofirst 300 touch higher, erasing early losses

* Banks, insurance, financial services top sectoral gainers

* Autos, energy among leading losers

By Peter Starck

FRANKFURT, Aug 28 (Reuters) - European stocks erased early losses to trade a touch higher by midday on Thursday, with financials, notably French bank Credit Agricole (CAGR.PA), among the leading gainers while car and energy stocks fell.

Reuters surveys of leading investment houses in the United States, continental Europe, Britain and Japan showed that an average mixed-asset portfolio held 57.4 percent in stocks in August, up from 56.7 percent in July.

The long-term average is just above 60 percent for equities.

"Everyone wants to overweight stocks, but don't know what the catalyst for an equities recovery will be," said Brian Gendreau, an investment strategist in New York for ING Investment Management Americas.

Trevor Greetham, manager of Fidelity's Multi Asset Strategic Fund, which remains underweight in equities, said the world economy seemed to be heading towards stagflation.

"The bottom (for world economic growth) will be reached at the earliest in 2009," said Greetham, who is overweight in defensive stocks, such as telecoms and health care.

At 1125 GMT, the pan-European FTSEurofirst 300 .FTEU3 index was trading 0.1 percent higher at 1,175.09 points -- on track in August for its ninth month of losses in the last 10.

Credit Agricole rose 7 percent despite posting a 94 percent fall in quarterly profit, hit by about 1.1 billion euros in writedowns related to the credit crisis and monoline insurers.

"People think that they've got the bulk of the writedowns out of the way and results in the third and fourth quarters will be better," said a London-based trader.

The DJ Stoxx European bank index .SX7P was up 2 percent, making it the session's top sectoral gainer. It was also supported by a 4.7 percent rise for Italy's Intesa Sanpaolo (ISP.MI), which reported a second-quarter net profit slightly above the market consensus.

Insurance .SXIP was the second-best performer with a rise of 1.2 percent, despite a 10.5 percent slide in shares of Swiss Life (SLHN.VX) after a profit warning and first-half earnings that missed analysts' forecasts due to writedowns.  Continued...