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* STOXX 600 down 0.5 pct, but remains close to 13-month high
* Allianz surges after strong update, stock buyback plan
* Drugmaker Stada gains after third takeover approach
* Banking stocks, miners slip on profit taking
* Vopak sees no profit growth, shares slump
* Live coverage: cpurl://apps.cp./cms/?pageId=livemarkets (Adds details, updates prices)
By Danilo Masoni
MILAN, Feb 17 (Reuters) - European shares fell on Fridaywith gains in insurance heavyweight Allianz and firmerpharma stocks more than offset by a pull-back in banking andmining stocks.
The pan-European STOXX 600 index fell 0.5 percentbut remained close to a 13-month high reached on Wednesday andon track to end higher for the second week in a row.
The rally has been fuelled by strong earnings updates, apick up in merger and acquisition (M&A) activity, with cyclicalstocks such as mining companies and banks lifted by solideconomic data.
Allianz rose 2.4 percent. Europe's largest insurer proposedspending 3 billion euros on buying back its own shares afterposting higher-than-expected profits and saying it was adjustingits policy on budgeting for possible takeovers.
The Munich-based firm also raised its dividend.
"The combination of a dividend increase and a share buy-backprobably both at the upper end of market expectations is a signof strength and should improve sentiment and provide tailwindfor the shares," DZ Bank analyst Thorsten Wenzel said.
Elsewhere in the insurance sector, Dutch insurer Aegon rose as much as 4.2 percent as investors cheered to astronger than expected pretax profit growth. Its shares paredgains and were last up 0.3 percent.
On the M&A front, Stada was once again in focusafter the German generic drugs company said it had received itsthird takeover approach, valuing the company at 58 euros pershare, above its current market value and higher than a previoustakeover offer. Its shares rose 1.1 percent.
Some big drugmaker stocks were also in demand, lifting thehealthcare index up slightly and making it the onlysectoral gainer in Europe.
Britain's AstraZeneca and GlaxoSmithKlinewere up 1.6 percent and 0.5 percent respectively after analystsat Jefferies raised the price target for both.
Europe's STOXX bank index fell 1.2 percent asinvestors booked profits for a second day after the index hit athree-week high on Wednesday, helped by growing expectations ofa rate hike next month in the United States.
Deutsche Bank, Standard Chartered andCredit Agricole fell between 2.6 and 2.8 percent.
Miners were also weaker, down 1.1 percent, pullingback after climbing earlier this week to their highest level inmore than two years. Copper slid on Friday because of someprofit taking, but the likelihood of strong demand from topconsumer China were expected to support prices.
"Short-term technicals remain in overbought territory makingrounds of profit-taking...more likely," said Markus Huber,trader at City of London Markets.
Top loser on the STOXX was Vopak, down 8.7percent, after the Dutch oil and chemical storage company saidit did not expect core profit to grow this year. (Reporting by Danilo Masoni; Editing by Angus MacSwan)
