Weak corporate updates and Ukraine woes dent European shares

* SABMiller (LSE: SAB.L - news) , Nestle (VTX: NESN.VX - news) give weak updates

* FTSEurofirst 300 and Euro STOXX 50 slip

* Ukraine tensions also weigh

* EPS growth needed to push shares higher -Reyl CIO

By Sudip Kar-Gupta

LONDON, April 15 (Reuters) - Weak updates by leading European companies held back the region's stock markets on Tuesday, while the threat of costly sanctions against Russia over the situation in Ukraine also pushed equities lower.

The pan-European FTSEurofirst 300 index, which rose 16 percent last year and hit a near six-year high of 1,355.29 points earlier this month, fell 0.3 percent to 1,315.28 points in mid-session trading.

The euro zone's blue-chip Euro STOXX 50 index retreated by 0.4 percent to 3,119.07 points. Germany's DAX index - which hit a record high of 9,794.05 points in late January - fell 0.6 percent to 9,281.89 points.

The DAX remained down after Germany's ZEW investor sentiment reading fell for the fourth month in a row in April, as tensions between Russia and Western powers over Ukraine darkened the outlook for Europe's largest economy.

Russia declared on Tuesday that Ukraine was on the brink of civil war as Kiev said an "anti-terrorist operation" against pro-Moscow separatists was underway, though the crackdown appeared to get off to a slow start.

"Things have not improved in Ukraine, and this is weighing on the markets," said Francois Savary, chief investment officer at Swiss bank Reyl.

Savary added that European stock markets now needed firm evidence of a recovery in earnings to move higher, after making little headway during the first quarter.

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European shares have rallied over the last year, helped by pledges from the European Central Bank (ECB) to support the economy in its recovery from the effects of the euro zone's sovereign debt crisis.

But this has also pushed stock market valuations higher, and many investors have said companies now need to show a strong recovery in profits to maintain the broader rally.

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Graphic on MSCI Europe valuations:

http://link.reuters.com/qug65s

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On Tuesday, several companies posted business updates that disappointed investors in some aspects.

Brewing company SAB Miller fell 2 percent after a sales update that some analysts said failed to meet forecasts.

French cosmetics group L'Oreal and Nestle both undershot market expectations with first-quarter sales, although they forecast a return to top-line growth in coming quarters.

Savary remained "overweight" on equities, but Clairinvest fund manager Ion-Marc Valahu said he had trimmed some equity holdings over the last three weeks.

"So far, the results are coming in worse than expected," Valahu said. "That's why the markets have been consolidating a little bit."

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 Larry King)