March 3, 2017 / 5:48 PM / a year ago

European shares enjoy best weekly gains of 2017, French banks up

* STOXX 600 down 0.2 pct

* CAC 40 hits 16-month high, up 0.7 pct

* French banks boosted by election poll

* Italian banks post best week since 2011

* WPP, Berendsen down sharply

* Focus on Fed officials (Updates prices)

By Atul Prakash and Helen Reid

LONDON, March 3 (Reuters) - European shares posted their best weekly gains of 2017 of Friday, although they were down on the day following disappointing company updates.

French stocks performed better after a poll eased anxieties over the impact on markets of the presidential election.

The pan-European STOXX 600 ended the day 0.1 percent lower after touching a 15-month high in the previous session. The benchmark index was up 1.4 percent on the week, however, its best weekly gain since early December, on a strong showing from financial stocks that would benefit from a U.S. interest rate hike seen as increasingly likely.

France’s blue-chip CAC 40 index closed up 0.7 percent, outperforming the broader European market, Germany’s DAX and Britain’s FTSE. It hit 5,002.32 points, its highest level since November 2015, after a poll suggested a victory for far-right leader Marine Le Pen in the French presidential election was less likely.

Shares in French banks BNP Paribas, Societe Generale and Credit Agricole were top performers, last up 2.8 to 4.6 percent.

The opinion poll by Odoxa showed centrist candidate Emmanel Macron ahead of Le Pen in the first round of the election for the first time.

WPP shares were down 8 percent after the world’s largest advertising group said it had a relatively slow start to 2017 and would plan conservatively for the year ahead after hitting its 2016 target for net sales growth.

The British company dragged down the European media index , which fell 2 percent, the biggest sectoral faller.

Workwear and hygiene company Berendsen slumped 11.4 percent, the biggest faller in the STOXX 600 index, after its financial results and outlook statement.

Losses for the index were capped by gains in Gemalto, and banking stocks.

Gemalto shares rose 8.1 percent, top gainers in the STOXX 600 index, after the digital security company said its profits from operations rose 7 percent in 2016.

Italian banks were top performers, with UBI Banca up 4.9 percent, BPER Banca gaining 4.5 percent, and Unicredit up 3.7 percent, contributing to the FTSE MIB’s outperformance, up 1.2 percent.

Italy’s banking index posted its best weekly gain since December 2011, up 13 percent since Monday’s open.

Exane said it saw “substantial upside” for most Italian banks, giving UBI, Intesa, Banco BPM and BPER Banca ‘outperform’ ratings and reinstating coverage on Unicredit with a ‘neutral’.

Deutsche Bank shares dropped in the afternoon after Germany’s biggest lender said it was studying its strategic options including a capital increase and the partial sale of its asset management business.

It was one of only three euro zone banking index stocks in the red on the day.

European stocks pulled back slightly ahead of appearances by Fed Chair Janet Yellen and Vice Chair Stanley Fischer.

“Even as many traders and analysts basically think that a rate hike in March is more or less a done deal, any comments to clarify this matter even more would be considered as positive for markets,” City of London Markets trader Markus Huber said. (Editing by Catherine Evans)

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