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* STOXX Europe 600 index end up 0.3 pct
* Investors focus on U.S. presidential vote
* AB Foods surges on encouraging update
* Banks, basic resources lead gainers; pharma underperform
By Atul Prakash and Danilo Masoni
LONDON/MILAN, Nov 8 (Reuters) - European shares edged higher in cautious trading on Tuesday, with encouraging updates from some companies underpinning the broader market on a day when investors stayed focused on the election battle in the United States.
The pan-European STOXX 600 index rose 0.3 percent, after surging 1.5 percent in the previous session on improved chances of Hillary Clinton becoming the next president.
Clinton got a boost on Sunday when the FBI said it stood by its July finding that the Democratic candidate was not guilty of criminal wrongdoing in her use of a private email server.
Clinton, seen as offering greater certainty and stability, held a narrow lead in opinion polls over Republican Donald Trump as millions of Americans turned out to vote. Polls begin to close at 0000 GMT on Wednesday, with the first meaningful results due about an hour later.
“As there are no new shocks in the press, it is clear that investors are cheering the Clinton lead, even if it is too close for absolute comfort,” said Lorne Baring, managing director of B Capital Wealth Management.
“Yesterday’s rally after a two-week decline indicates that the home straight has been entered and the market feels that the Democrat horse will win by a length. The race is not over yet though.”
Investors stayed cautious as less than five months ago Britain’s shock vote to leave the European Union had defied most polls and bookmakers’ odds. However, some analysts said the market’s reaction could not be as sharp as some were expecting.
“Similar to our views pre-Brexit, we believe the already high levels of risk premia embedded within equities coupled with the improving global economic backdrop should help to cushion any significant downside if Trump were to win,” Barclays said.
Basic resources and banks were among the top sectoral gainers on Tuesday, while Healthcare underperformed to close little changed. Barclays said banking and materials stocks should benefit in the near term from a Clinton win, while healthcare would benefit if Trump wins.
The earnings season continued to move the market on Tuesday.
Shares in Primark owner Associated British Foods surged 5.8 percent after the company said it expected profits to increase in the next fiscal year. It added that earnings could ultimately benefit from Britain’s vote to leave the European Union.
“We are long-standing admirers of the ABF business, and continue to believe in the medium to long term potential from Primark, being one of the most potent retail formats in Europe,” Shore Capital said in a note. “However ... the profit progress will not be as linear as many had suggested.”
Credit Agricole advanced 5.6 percent after the French lender said it had completed a simplification of its structure in the third quarter that puts more capital into the listed arm of the business, allowing it to set a minimum dividend level for next year.
However, ArcelorMittal fell 4.3 percent after the world’s largest producer of steel reported third-quarter core profit below expectations and said its final quarter would be weaker than the third.
Vestas slumped 9.1 percent after the world’s biggest wind turbine maker warned of a slowdown in its key U.S. market next year, overshadowing robust third-quarter results and an upgrade to its 2016 sales forecast. (Editing by Mark Heinrich)