* Infineon drops 5.6 pct after warning of lower revenues
* FTSEurofirst 300 dips 0.6 pct, drifts off 5-year highs
* Euro STOXX 50 falls 0.6 pct to 3,034.68 points
* Rally has stalled on weak corporate results
* Some fund managers still positive longer-term on stocks
* European equities to benefit from stronger economy -UBP
By Sudip Kar-Gupta
LONDON, Nov 12 (Reuters) - European shares edged lower on Tuesday as a fresh set of weak corporate results put the brakes on a rally that had pushed a major regional equity index to a five-year high last week.
The pan-European FTSEurofirst 300 index, which hit a five-year high of 1,316.42 points on Nov. 7, closed down 0.6 percent at 1,290.92 points. The euro zone’s Euro STOXX 50 index also fell 0.6 percent to 3,034.68 points.
The FTSEurofirst 300’s rally, which has taken the index up by around 14 percent since the start of 2013, has stalled over the last two weeks on some weak results from leading European companies.
Even so, the OECD reported a firmer outlook for developed economies on Tuesday and some investment management firms say equities still have scope for gains.
German chip maker Infineon became the latest company whose results update disappointed investors, as its shares fell 5.6 percent after Infineon flagged a drop in revenue for the current fiscal quarter.
Results from around half the companies on the pan-European STOXX 600 index to have posted quarterly earnings so far have missed profit forecasts, according to data from Thomson Reuters StarMine. Nearly two-thirds have missed revenue forecasts.
“We expect a below-par earnings recovery next year, and earnings revisions have recently deteriorated,” said Morgan Stanley European equity strategist Matthew Garman.
The strengthening in the U.S. economy has increased expectations that the U.S. Federal Reserve will soon start to scale back or “taper” economic stimulus measures that have driven much of this year’s equity rally.
But Rob Jones, co-head of pan-European equities at Union Bancaire Privee, said: “We still hold to the view that European economies are showing the early signs of recovery and we believe that this recovery will drive equity markets higher over the next year.”
ING Investment Management also said a strengthening global economy could push equities up further.