Telefonica tumbles as European shares slip back

* FTSEurofirst 300 retreats from fresh highs hit on Thursday

* Telefonica (Madrid: TEF.MC - news) falls after Q1 profits miss forecasts

* Prospect of new ECB stimulus keeps some traders bullish

By Sudip Kar-Gupta

LONDON, May 9 (Reuters) - European shares slipped back on Friday as disappointing business updates from leading companies such as telecoms operator Telefonica sobered the mood after a rally on the previous day.

The pan-European FTSEurofirst 300 index, which on Thursday hit a 2014 peak of 1,359.07 points which marked its highest level in around 6 years, fell 0.2 percent to 1,356.50 points in early session trading.

The euro zone's blue-chip Euro STOXX 50 index also retreated by 0.4 percent to 3,192.70 points. The FTSEurofirst 300 and Euro STOXX 50 both remain up by around 3 percent since the start of 2014.

Shares in Spanish group Telefonica fell 2.2 percent as the company posted a 23 percent fall in first quarter net profits that missed market expectations.

Energy services group Petrofac (Frankfurt: A0HF9Y - news) also slumped by 15 percent after it issued a profit warning.

Nearly two-thirds of companies listed on the pan-European STOXX Europe 600 index have posted first-quarter updates so far, and half of them have missed consensus forecasts, according to Thomson Reuters StarMine data.

"A net 26 percent of European companies have missed on the top-line so far in this reporting season, the worst since the dark days of 2009," said UBS European equity strategist Nick Nelson.

Terry Torrison, managing director at Monaco-based McLaren Securities, expected European equity markets to make little progress and drift in the coming months.

However, he expected European equities to then push higher in the second half of 2014, buoyed by expectations that the European Central Bank (ECB) could inject new measures - such as a rate cut - to support the region's economic recovery.

ECB President Mario Draghi said on Thursday that the ECB was ready to take action next month to boost the euro zone economy if updated inflation forecasts merited such a move.

"In the short-term, we may drift, but I'm still bullish on the second-half of this year. At some point, Draghi is going to come up with something," he said.

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 Francesco Canepa; Editing by Toby Chopra)