By Nikhil Sharma and Johann M Cherian

(Reuters) - European shares eked out an all-time high on Wednesday, as investors cheered earnings reports from Heineken and ABN AMRO, although some caution around U.S. inflation data and trade policies prevailed.

The pan-European STOXX 600 index settled a choppy session up 0.1%, with Germany's benchmark also at a record peak.

European banks led sectoral gains with a 1.1% advance, with ABN AMRO up 8.2% at a more than five-year high after the Dutch bank's fourth-quarter results beat market expectations.

The food and beverages sector was next in line with a 1% increase. Heineken soared 14.4% - its biggest daily rise on record after the brewer reported better-than-expected profit, launched a share buyback and forecast further growth in operating profit in 2025.

Its peers Anheuser-Busch InBev and Carlsberg also rose 2.8% and 3.2%, respectively. 

On the other hand stocks of dividend-paying utilities fell 1% against a rise in European bond yields, after U.S. data showed consumer prices increased by the most in nearly 1-1/2 years in January, lifting bets that the Federal Reserve could deliver only one interest rate cut this year.

Investors also braced for an intensifying global trade war. U.S. President Donald Trump is expected to announce his reciprocal tariff policy later in the day, which is likely to receive a response by the export-dependent European Union.

"Tariffs are not simply a negotiating strategy and that has been our starting view. There is something else in terms of a belief that it is a source of potential revenue to try and equalize perceived injustices in trade," said Richard Flax, chief investment officer at Moneyfarm.

"Defence spending, given the strength of U.S. defence companies, is a good way to improve your trade balance... but I would hesitate to say too much about what could be the kind of compromise on the European side."

Despite an uncertain global trade backdrop, the STOXX 600 has risen nearly 8% this year on tailwinds helped by solid earnings from some European companies and on expectations that a weak euro could aid near-term export-oriented corporate revenues.

Among others, Carl Zeiss Meditec <AFXG.DE> slid 12.5% after the German optical systems maker posted downbeat quarterly core earnings.

Storebrand fell 9.3% after the Norwegian insurer and financial services firm missed analyst consensus estimates for fourth quarter profit.

Randstad <RAND.AS> lost 6.5% with analysts pointing to the world's largest employment agency posting a bigger than expected organic revenue decline of 5.5% in the fourth quarter.

Nearly 59% of the 129 firms in the STOXX 600 that have posted quarterly earnings, have exceeded analysts' estimates, according to data compiled by LSEG.

(Reporting by Nikhil Sharma and Johann M Cherian; Editing by Rashmi Aich and Mrigank Dhaniwala)