European shares slip from highs, knocked by autos and insurers

* FTSEurofirst 300 down 0.3 pct

* BMW (Xetra: 519000 - news) hits autos, insurers knocked by RSA outlook

* Two in three companies missing revenue forecasts -StarMine

By Alistair Smout

PARIS, Nov 5 (Reuters) - European shares slipped off a

five-year high on Tuesday, led lower by car-makers and insurers

as more European blue chips undershot earnings expectations.

Uncertainty in the run-up to an ECB policy meeting also kept

investor enthusiasm - and volumes - in check.

Autos were led lower by BMW, which dropped 2.6

percent after the German carmaker said quarterly profit at its

auto unit fell more than expected, hurt in part by price

discounts in core European markets.

Renault (TLO: RENA-U.TI - news) also fell 2.6 percent, extending a recent

slide, after shares in Japanese partner Nissan tumbled

following a profit warning.

The broader Autos and Parts index fell 1.3 percent,

among the top sectoral fallers in Europe.

Half way into the European earnings season, 52 percent of

STOXX Europe 600 companies have missed profit

forecasts, and two thirds have missed revenue forecasts,

according to data from Thomson Reuters StarMine, a sharp

contrast with the second-quarter result season during which only

42 percent of companies missed profit forecasts.

"You can manipulate earnings expectations... but it's harder

to do that with revenues," Andy Ash, head of trading at Monument

Securities, said.

"The rally we've had over the last year has essentially been

through multiple expansion and not through earnings, and sooner

or later the market sees through that," he said, referring to

investors paying more for stocks because they see economic risks

abating, even though earnings have not increased.

At 1540 GMT, the FTSEurofirst 300 index of top

European shares was down 0.3 percent at 1,289.41 points, after

rising as high as 1,297.29 in early trade, a level not seen

since mid-2008.

Insurers also fell after Britain's largest general

insurer RSA said last week's wind storms in northern

Europe would hit profits, sending its shares tumbling 6.3

percent.

Legal & General (LSE: LGEN.L - news) fell 3 percent despite posting

higher-than-expected sales, as a recent strong run and steep

valuation meant its figures were not as favourable as some had

hoped.

"We still do not see any value within our valuation

framework, though we acknowledge the positive trends in the

business," Roderick Wallace, S&P Capital IQ Equity Research

Analyst, said in a note. The stock had been up nearly 47 percent

for the year.

In Europe, recent tame inflation figures have sparked

speculation about a possible rate cut by the European Central

Bank when it meets on Thursday, though all but one of 23 euro

money market traders polled by Reuters on Monday expect the ECB

to leave borrowing costs unchanged at 0.5 percent.

"The market would be very disappointed if they don't get

some guidance of a rate cut soon," Monument's Ash said.

"I think a rate cut is now factored into the market (as

happening) before the end of December."