Weak Zurich earnings cap European shares near 5-year high
* FTSEurofirst 300 down 0.1 percent
* Zurich Insurance falls 1.2 percent after Q1 miss
* Richemont surges after proposing dividend hike
By David Brett
LONDON, May 16 (Reuters) - Weak earnings from Zurich Insurance Group kept a lid on European shares early on Thursday, with more gains expected in a market that yield-hungry investors have already driven to multi-year highs.
The heavyweight Swiss insurer fell 1.2 percent after missing expectations with a 7 percent fall in first-quarter net profit.
At 0726 GMT, the FTSEurofirst 300 was down 0.1 percent at 1,244.30. It set five-year highs in the previous session, when weak growth data fanned speculation the European Central Bank would take more measures to boost the sluggish economy.
"Markets have rallied hard recently and in a low interest rate environment and with quantitative easing measures in place, equities are still the place to be," Jawaid Afsar, sales trader at SecurEquity, said.
The hunt for investment returns was reflected in a 6.1 percent rise for Richemont, after the Swiss watchmaker and jeweler proposed a substantial hike in its dividend to 1 Swiss franc per share.
The announcement helped fuel gains among peers including Swatch, which climbed 2.9 percent.
Swedish communications firm Tele2 fell 24 percent after trading without rights to a hefty special dividend.
The recent surge in markets helped Aviva business rise by nearly a fifth in its first quarter. The British insurer's shares rose 3.7 percent.
Citi strategist Robert Buckland said he expected markets to make further gains, supported by moderate earnings per share growth and dividend increases, though valuations implied less impressive gains from here.
Around 53 percent of European companies have so far missed earnings expectations for the most recent quarter, according to Thomson Reuters Starmine data.
European shares trade on a forward 12-month price-to-earnings of 13 times, which is post credit-crisis highs, while the FTSEurofirst is just 2 points off its 52-week high of 1,246.44, according to Thomson Reuters data.