* Earnings forecasts lowered the most in five years
* UK revisions worse than for euro zone countries
* UK companies suffer from exposure to China, emerging markets
LONDON, April 10 (Reuters) - Analysts have steadily lowered profit forecasts for UK companies since the start of 2014, data from Thomson Reuters Datastream shows, a signal that Britain's top equity index could continue to underperform other European markets.
The data contrast sharply with the British economy itself, whose recovery from recession is gaining momentum. This week, the International Monetary Fund raised its growth forecasts for the UK more than for any other major economy.
However, revised earnings per share estimates for UK companies over a rolling three-month period have worsened since late January. The average estimate has fallen 7 percent in the past three months, compared with a 3.2 percent drop in the three months to late January, according to Datastream.
The UK earnings revision reading is the worst among major European countries. The last time UK companies experienced such a wave of earnings forecast downgrades was in 2009, as profits took a hit from the global financial crisis.
Chart on earnings revisions: link.reuters.com/tyc48v
AXA Investment Managers' strategist Mathieu L'Hoir said the revisions reflected the fact that many companies in Britain's benchmark FTSE 100 index were more exposed to problems in emerging markets than to growth in Britain.
Major mining stocks, for example, account for around 9 percent of the benchmark UK stock market, according to data from index compiler FTSE, and those shares have been hit over the past year by concern China's economic growth is slowing.
"The fact is, the UK market and particularly the blue chips are not domestic companies. A lot of them are overseas firms listed in London, such as oil majors and mega-cap Australian miners, which explains the de-correlation with the UK economy," L'Hoir said.
"This is basically a sector that is very sensitive to the Chinese newsflow," he said. "That's why UK stocks have been underperforming lately and earnings forecasts are being slashed."
Since the start of 2014, the FTSE has underperformed other benchmark European stock markets. The FTSE has fallen nearly 2 percent, more than a 0.4 percent dip on Germany's DAX. France's CAC has risen around 4 percent.
Edmund Shing, a global equity fund manager at BCS Asset Management, said the relative strength of sterling against the euro was also weighing on UK corporate profits, which in turn could hurt the UK equity market.
"The strength of sterling is acting as something of a brake on UK earnings," said Shing. (Editing by Larry King)