European shares pause as broadcasters sag after updates

* FTSEurofirst 300 flat, just off 6-year high

* Media stocks lead fallers as Mediaset (Other OTC: MDIUY - news) , ITV (LSE: ITV.L - news) disappoint

* Portugal stocks sag; talk of capital hike hitting banks

By Francesco Canepa

LONDON, May 14 (Reuters) - Weak corporate updates, especially in the media sector, caused European shares to pause on Wednesday after a two month-rally that has propelled many regional indexes to multi-year highs.

The STOXX Europe 600 media index fell 1.3 percent, the worst performer among sector indexes, as disappointing results by broadcasters ITV and Mediaset cast a shadow on a strong reporting season so far for the industry.

Around 67 percent of media companies in the STOXX Europe 600 index that reported results through May 13 met or beat consensus estimates, compared to roughly half for the index as a whole, StarMine data shows.

Shares in ITV, which will broadcast the World Cup finals in June, had risen 5 percent over the previous two weeks, suggesting investor expectations of the results were high.

"The market was looking for a set of numbers that would allow for upgrades to consensus forecasts and they did not get that today," Jefferies & Company analyst David Reynolds said.

The FTSEurofirst 300 index of top European shares closed flat at 1,368.38 points after touching 1,369.22 points earlier in the session, a high not seen since May 2008.

Credit Suisse Group advanced 0.6 percent, steadying after a 2.7 percent fall on Tuesday, when the Swiss lender's stock went ex-dividend.

European stocks have been lifted by expectations the European Central Bank will take new steps as soon as next month to keep inflation from staying too low. The FTSEurofirst 300 rose some 7 percent from lows in March.

PORTUGAL LAGS

Portugal's PSI 20 index fell 3.4 percent, led lower by banking stocks after a report said Millennium bcp was considering a capital increase.

A spokesman for the bank, Portugal's largest private lender, said on Wednesday it has made no decision about a possible capital increase.

Shares in Millennium were down 10.8 percent. Banco Espirito Santo lost 8.2 percent.

The PSI 20 had outperformed broad European indexes in the first four months of the year, rising as much as 19 percent as Portuguese bond yields dropped and investor confidence in the country improved ahead of an exit from its bailout programme.

But Portuguese stocks started to fall in mid-April, and the PSI 20 hit a near three-month low on Wednesday.

A number of traders said the rally could run out of steam as investors look for an opportunity to cash in on its rise. Peripheral euro zone markets, including Italy and Portugal, have seen profit-taking this week after outperforming in 2014.

"For me, it's overdone here, and there's a pullback coming," said Darren Courtney-Cook, head of trading at Central Markets Investment Management.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up

(Additional reporting by Blaise Robinson and Alexandre Boksenbaum-Granier in Paris; Sudip Kar-Gupta in London; Editing by Catherine Evans)