* FTSEurofirst 300 up 0.2 percent, up for 4th straight session
* Euro STOXX 50 up 0.3 percent, crosses 50-day moving average
* Mining stocks fall; volatility index up ahead of Fed
* Parmalat jump 11.5 percent on Lactalis takeover bid
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By Blaise Robinson
PARIS, April 26 (Reuters) - European stocks edged higher on Tuesday, gaining ground for the fourth consecutive session after UBS's results sparked a rally in the financial sector.
Gains were limited as heavyweight mining shares retreated along with metal prices as investors trimmed their exposure to risky assets such as resource-related stocks ahead of the U.S. Federal Reserve's interest rate meeting.
At 1128 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,144.41 points, after rising to a two-week high of 1,146.37 points earlier in the session.
"People are cutting risk ahead of the Fed meeting. The cautious stance is not only on the end of QE2 and the outlook for rates but also on the fact that Bernanke will hold his first-ever post-meeting press conference. The fact that the Fed is changing the way it communicates is keeping investors on edge," said David Thebault, head of quantitative sales trading, at Paris-based Global Equities.
Anglo American was down 1 percent and ArcelorMittal down 0.9 percent.
The Euro STOXX 50 volatility index, one of Europe's main barometers of anxiety, was up 5.2 percent on Tuesday, signalling a rise in investors' risk aversion ahead of the Fed's two-day policy meeting that starts on Tuesday.
The central bank is expected to stick to its plan to complete its $600 billion bond-buying program in June, but questions about the exit strategy will likely arise on Wednesday when Fed Chairman Ben Bernanke holds a news conference during which he may give hints on the central bank's thinking on the matter.
"(Bernanke) may more clearly signal that QE2 is indeed expected to end on June 30. Since this outcome is widely anticipated, more interesting would be any comments with respect to the Fed's reinvestment program," RBS strategists wrote in a note.
"At this time, most market participants expect the reinvestment of MBS securities to extend beyond June 30. Any signal that the Fed might be considering an end to "QE lite" at the end of June as well could trigger a rethink of the Fed's timetable for policy normalisation," they wrote.
Shares in Swiss lender UBS rose 5.3 percent after saying money poured back into its core wealth management arm in the first quarter. Swiss rivals Julius Baer and Credit Suisse were up 1.9 to 2.2 percent, while Barclays was up 0.7 percent and Deutsche Bank up 0.8 percent.
Around Europe, UK's FTSE 100 index was up 0.3 percent, Germany's DAX index up 0.4 percent, and France's CAC 40 up 0.2 percent.
"I think it makes sense to be 'long' on stocks in the medium term. That being said, it's not a bad idea for protection against potential downside moves to play a put spread using the 100-day moving average on Euro STOXX 50 futures as a trigger. You buy the put when the futures move above the 100-day moving average," Global Equities' Thebault said.
Italian dairy group Parmalat rose 11.5 percent after French rival Lactalis launched a $4.9 billion takeover bid for it.
The FTSEurofirst 300 index of top European shares has gained 3.2 percent over the past week, supported by better-than-expected corporate earnings.
So far, nearly 60 percent of 31 STOXX Europe 600 companies that have reported first quarter earnings have met or beaten analysts' forecasts, a figure that trails behind Wall Street's strong showing so far in the earnings season, according to data from Thomson Reuters StarMine.
Of the 156 S&P 500 companies that have reported quarterly results, 81 percent have either beaten or met market expectations, while 19 percent have missed forecasts. (Reporting by Blaise Robinson. Additional reporting by Dominic Lau in London; Editing by Hans Peters)