* FTSEurofirst 300 rose 7.26 points to 1,298.84
* Earnings beats for ING and Adecco boost sentiment
* Experian slides after results as BofA ML downgrades
By David Brett
LONDON, Nov 6 (Reuters) - European shares edged higher on Wednesday, setting fresh five-year highs along the way, as a batch of bullish updates helped the market regain ground lost in the previous session.
By 1116 GMT, the FTSEurofirst 300 was up 7.26 points, or 0.6 percent at 1,298.84, having briefly touched 1,300 for the first-time since early June 2008.
Results from Dutch banking and insurance group ING and Adecco, the world's No. 1 staffing agency, beat forecasts while cement major Lafarge confirmed debt reduction targets for this year and next.
Shares in ING rose 4.4 percent, Adecco 3.7 percent and Lafarge was up one percent.
Budget airline easyJet rallied 2.6 percent after announcing a 5.4 percent rise in October passenger traffic, and infrastructure firm Alstom climbed 3.8 percent after allaying fears that the company would need to raise capital as it said its balance sheet was robust.
12-month forward earnings forecasts, however, continue to experience more downgrades than upgrades according to Datastream.
Half way into the European earnings season, 52 percent of STOXX Europe 600 companies have missed profit forecasts, and two thirds have missed revenue forecasts, according to data from Thomson Reuters StarMine. This is in sharp contrast with the second-quarter results season during which only 42 percent of companies missed profit forecasts.
"The (European) earnings are not proving a headwind to the rally in markets but I think we've got two other factors to think about," Andrew Milligan, head of global strategy at Standard Life Investments, said.
He said the market was weighing up the balance of global economic data and the looming withdrawal of quantitative easing in the U.S., potentially in March, which has diluted returns in alternative asset classes and boosted equities.
"There's a lot of money which I think very clearly is saying, if the Fed's not going to move... I certainly might buy some equity and this might only be a three/six month cycle but I'm going to take advantage of it."
RATE CUT EYED
European stocks have been rallying over the past four weeks, boosted in part by expectations that both euro zone and U.S. monetary policy will remain accommodative for some time.
Data on Wednesday showing a loss of momentum in the euro zone private sector and recent tame inflation figures have fuelled speculation about a possible interest rate cut by the European Central Bank when it meets on Thursday.
Weak earnings and markets at multi year highs have left valuations looking on the expensive side compared with earnings momentum - 12-month forward price-to-earnings on the STOXX 600 is around 13.6 times, well above its 10-year average.
"Markets are looking a bit toppy ... A Eurozone rate cut should be enough to keep the markets happy for now although people will be looking for an excuse to take profits," Mark Ward, head of trading at Sanlam Securities, said.
British credit data provider Experian shed 6.1 percent, the top faller in Europe as BofA ML downgraded its rating on the company to "neutral", citing valuation concerns after Experian reported first-half results.
Unilever, the household goods firm which recently issued a profit warning, slipped 2.2 percent with traders citing Nomura's downgrade of the company to "neutral" as weighing on the shares. "We see minimal returns until FY2013 results," the broker said.
Vopak, the oil services firm, shed 2.1 percent after reporting a 5 percent fall in three-quarter EBITDA.