* FTSEurofirst 300 down 0.4 pct, retreats from 5-year high
* Options expiry could spark volatility
* Charts show EuroSTOXX 50 vulnerable to correction-SEB
By Toni Vorobyova
LONDON, May 17 (Reuters) - European shares edged off multi-year highs on Friday, spooked by some U.S. policymakers talking about the possible future removal of monetary stimulus - the key driver of the market rally.
Three hawkish Federal Reserve officials called for the U.S. central bank to halt bond purchases as soon as the summer, sending Wall Street lower and souring risk appetite.
With the weekend looming, the remarks gave investors an excuse to take profits on some 9 percent of gains in European stocks in the past month which had pushed key indexes into overbought territory.
However, losses were seen capped by continued strong investor appetite to buy the markets on dips, as well as by the fact that the end of stimulus is not yet seen as a consensus view at the Fed and the hawkish comments have generally come from non-voting members.
The FTSEurofirst 300 was down 0.4 percent at 1,240.05 points by 0739 GMT, retreating from the previous session's 5-year peak of 1,247.57 but still on track for a weekly gain.
"There is a bit of profit-taking, it's no real surprise to see the markets a bit softer ... (But) for the last few weeks, any downtick has been bought and, if we do get some significant fall-off today, I wouldn't be surprised to see some buyers come in," said Vinay Sharma, trader at Gekko Global Markets.
The monthly options expiry could add to volatility on Friday, with 2,800 a key level on EuroSTOXX 50. The vast majority of puts are set to finish out-of-the-money, potentially discouraging investors from rolling them over and thus leaving the market more exposed to any downside move.
Technical charts showed the case building for a correction.
"We printed fresh highs and I think they (markets) are quite vulnerable for at least a correction," said Dag Muller, technical analyst at SEB.
He added that European indexes - such as EuroSTOXX 50, down 0.4 percent at 2,795.92 - looked more vulnerable than their U.S. peers.
"Breaking 2,783 (on EuroSTOXX 50) would bring it back down to 2,760 and possibly also test the March high at 2,745. But we are trending higher and it's always hard to pick the peak in a trend like this," Muller said.
The earnings season also offered some cause for market weakness, with shares in Intertek Group falling 3.7 percent after the British testing firm reported a sharper than expected decline in margins.
Of the STOXX Europe 600 companies who have reported first quarter numbers already, 53 percent have missed forecasts on earnings and 57 percent have undershot on revenues, according to Thomson Reuters StarMine data.