Europe Shares Inch Up; Banks Hit by Profit Taking

European shares inched higher on Wednesday, with a key index moving back towards a near two-year high hit recently, although a bout of profit taking on banking and insurance shares limited the market's rise.

Corporate results were in the spotlight, with shares of Unilever gaining 3.1 percent after the consumer-goods giant posted better-than-expected sales while Novartis added 4.1 percent after the Swiss pharmaceuticals group unveiled a reassuring sales growth forecast. In addition, global software maker SAP issued an operating profit outlook that topped estimates.

The pan-European FTSEurofirst 300 Index of top European shares provisionally closed 0.2 percent higher at 1,168.00 points, just a few points below a peak of 1,170.29 points hit two weeks ago, a level not seen since early 2011. Britain's FTSE 100, the French CAC and the German DAX closed marginally higher, while the Spanish Ibex and Italy's FTSE MIB ended Wednesday's trading session lower.

The euro zone's blue chip Euro STOXX 50 index fell 0.3 percent to 2,709.83 points, dragged lower by falling shares of financial institutions after lofty gains so far this year.

Societe Generale dropped 3.5 percent, Banco Popolare fell 4.1 percent and Aegon lost 2.2 percent.

Despite the day's losses, the STOXX euro zone banking index is still up 10 percent in 2013, by far the best sector performance.

"The newsflow on the political and macro side is very thin, so there's a bit of hesitation to chase the market higher and we're seeing some rotation between sectors," Saxo Banque senior sales trader Alexandre Baradez said.

"We need some kind of big positive catalyst, better-than-expected Apple results for instance, or good macro data."

U.S. tech major Apple is set to report quarterly results later on Wednesday.

In the U.K., Prime Minister David Cameron gave his much-anticipated speech on the nation's future in the EU. Cameron promised to give the British public a national referendum on whether to stay in the EU or leave, assuming he is re-elected in national elections in 2015.

In a press release after the speech, Simon Walker, director general of the Institute of Directors, a U.K.-based lobby group, said:

"The Prime Minister's approach is realistic and pragmatic. The British public, and many of our members, are skeptical about many of the institutions and practices of the EU. We need to put their doubts to rest."