European shares dip as rally stalls on weak results

* Infineon (Xetra: 623100 - news) drops 6 pct after warning of lower revenues

* FTSEurofirst 300 dips 0.4 pct, drifting off five-year highs

* Rally has stalled on signs of weak corporate results

* Some fund managers keep longer-term positive equity outlook

* 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 key regional equity index to a five-year high last week.

Nevertheless, some investment management firms felt the outlook for equities remained positive.

Both Union Bancaire Privee (UBP) and ING Investment Management felt equities would rise further given an improvement in the global economy, with the OECD on Tuesday saying the outlook for growth in developed economies had strengthened.

The pan-European FTSEurofirst 300 index, which hit a five-year high of 1,316.42 points on Nov. 7, was down by 0.4 percent at 1,292.66 points in late session trading. The euro zone's Euro STOXX 50 index fell 0.2 percent to 3,046.39 points.

The FTSEurofirst 300's rally, which has seen the index rise by around 14 percent since the start of 2013, has stalled over the last two weeks as some weak corporate results from leading European companies have weighed on the region's stock markets.

German chip maker Infineon became the latest company whose results update disappointed investors, as its shares fell 6.3 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.

UBP fund manager Rob Jones felt European equity markets would rise next year, however, while ING IM also said the outlook for equities was bullish.

STRONGER ECONOMIC BACKDROP

The improvement 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 some fund managers felt stock markets would not be unduly impacted given the improvement in the broader economy.

Jones, co-head of pan-European equities at UBP, expects a stronger European economy to lift the region's stock markets next year.

"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," he said.