European share markets flat, focused on ECB

* FTSEurofirst 300 down 0.95 points at 1,295.63

* Trading cautious ahead of ECB rate decision,

* Markets also eyeing U.S. GDP, payrolls numbers

* HeidelbergCement (LSE: 0MG2.L - news) falls on outlook worries

* Commerzbank (Xetra: CBK100 - news) rebounds after 15 pct rise in quarterly profit

By David Brett

LONDON, Nov 7 (Reuters) - European shares opened marginally

lower on Thursday as investors adopted a cautious stance before

a policy update in which the European Central Bank is expected

to signal monetary easing ahead.

The ECB is likely to leave interest rates at a record low at

1245 GMT, though there is an outside chance of cut after

surprisingly weak euro zone inflation data.

Markets are also processing a heavy slate of corporate

earnings and will keep a close eye on upcoming U.S. data.

The Bank of England also holds a policy meeting on Thursday.

"There is a lot for investors to digest today and tomorrow,

with some potentially choosing to take profit," Keith Bowman,

equity analyst at Hargreaves Lansdown (LSE: HL.L - news) , said.

By 0815 GMT, the FTSEurofirst 300 was down 0.95 of

a point at 1,295.63, still within touching distance of five-year

highs reached amid an equity-friendly monetary policy backdrop.

But traders said valuations are beginning to look stretched.

Europe's STOXX 600 trades on a 12-month forward

price-to-earnings (PE) of around 13.6 times, well above its

10-year average.

"Markets are looking tired and in the short term we may see

a correction with a euro zone rate cut priced in," Jawaid Afsar,

sales trader at SecurEquity, said.

U.S. July-September GDP data, due at 1330 GMT, and Friday's

nonfarm payrolls report for October will be scrutinised for

insight into the potential timing of the Federal Reserve's

eventual move to trim its stimulus.

"U.S. jobs data this Friday may provide a catalyst for a

minor pullback but overall one should look to buy the weakness

for a year-end rally," Afsar said.

EARNINGS

Nearly 200 European companies announce results on Thursday.

Among them, HeidelbergCement shed 2.6 percent

after warning 2013 targets would be tougher to achieve.

The world's largest maker of switches and sockets, Legrand (Other OTC: LGRVF - news) ,

also slipped 2.6 percent after nine-month profit

dipped.

Schroders (LSE: SDR.L - news) fell 2 percent on valuation worries - the

fund firm trades on a PE of 17.1 times, compared with peers on

13.3 times - despite reporting net inflows of 1 billion pounds.

"Whilst this morning's update no doubt points to the

distribution and sales capability of Schroders, we believe this

operating excellence is very much in the price," Shore Capital

says in a note.

Rebounding firmly was Commerzbank, up 7.2 percent

after posting a 15 percent rise in quarterly net profit and

saying a strategic overhaul was on track.

ArcelorMittal (Other OTC: AMSYF - news) , the world's largest steelmaker,

rose 3.4 percent after it reported strong third quarter profits

and said it was through the bottom of the cycle.

Global No. 2 reinsurer Swiss Re (Other OTC: SSREF - news) added 3 percent

after announcing it would consider a special dividend as a way

to return excess capital to shareholders.

According to Thomson Reuters StarMine data, 64 percent of

firms on the STOXX Europe 600 have reported results so far, of

which 49 percent have met or beaten earnings expectations and 34

percent reported above-forecast revenues.