* FTSEurofirst 300 index up 0.7 percent
* BoE raises quantiative easing; ECB rate decision awaited
* Results push banks, insurers higher
By Joanne Frearson
LONDON, Aug 6 (Reuters) - European shares were higher at midday on Thursday as the Bank of England raised quantitative easing to 175 billion pounds ($297.3 billion), with financials boosted by results from KBC and British insurer Aviva.
By 1119 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.9 percent at 942.49 points, having been up as much as 945.47 points.
The Bank of England extended its quantitative easing programme, raising the size of its bond purchase scheme to an unexpectedly large 175 billion pounds from 125 billion, and held interest rates at 0.5 percent.
The decision enables the central bank to continue its programme of asset purchases with newly created money -- which it started in March to boost Britain's recession-hit economy -- as the last of the 125 billion pounds was spent in late July.
"The market came off a bit initially as it was not what the market was expecting and investors started to panic. But the market over the past couple of months has rallied over the Bank of England's quantitative easing programme and this is just a continuation of that," a London-based trader said.
At 1145 GMT, the European Central Bank is expected to keep interest rates on hold at 1.0 percent for the third month in a row as it waits to see the impact of efforts so far to revive the economy and credit flows.
"Financials remain the focus, the general view is if banks are starting to show less-bad results then the market view seems to be that things are getting better," said Peter Dixon, economist at Commerzbank.
Banks added the most points to the index, although stocks in the sector were mixed. Belgian banking and insurance group KBC surged 16.9 percent after it returned to profit in the second quarter, following three straight quarterly losses.
French bank Natixis rose 17.9 percent following market speculation it might be delisted.
Among other banks Barclays, Societe Generale, Credit Suisse and Banco Santander were up 1.1 to 4.6 percent.
However, Commerzbank retreated from earlier gains to be down 2 percent. The bank's second-quarter operating results beat analyst expectations, but it said it is reviewing whether to use the "bad bank" scheme.
RESULTS BOOST INSURERS
Insurers were boosted by a slew of positive earnings. Britain's Aviva rose 7.2 percent after it announced a dividend cut less than some market players had expected and a partially initial public offering of its Delta Lloyd.
Swiss insurer Zurich Financial Services gained 2.4 percent after it said its capital position was strong and it remained confident it was well positioned in the financial crisis as it beat second-quarter earnings expectations.
AXA ticked up 1.3 percent after it posted a smaller-than-expected decline in first-half earnings and said it was ready to face any further downturn in the market.
Food producers were among high movers. Unilever gained 6.4 percent after beating consensus expectations with a 4.1 percent rise in second-quarter underlying sales and making a surprisingly strong return to volume growth.
The FTSEurofirst 300 index is up more than 45 percent from its lifetime low of March 9, as investors have become more confident on the prospects of recovery, and with the company earnings season having been mostly positive.
"The 200-day moving averages are turning up, a signal that it's a bull market," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.
"But the market is trading above the averages for now and, in the near term, there is vulnerability to some kind of correction, as it looks stretched."
Across Europe, the FTSE 100 index was up 1.3 percent, Germany's DAX was up 0.7 percent and France's CAC 40 was 0.9 percent higher. (Additional reporting by Brian Gorman; Editing by David Holmes)