* FTSEurofirst 300 steady around 5-year highs
* Philips, AkzoNobel, SAP rise after results
* Weekly flows to European equities strongest in 2 yrs -EPFR
By Toni Vorobyova
LONDON, Oct 21 (Reuters) - European shares steadied aroundfive-year highs on Monday, bolstered by a crop of solidcorporate earnings but with investors reluctant to put on bigbets at the start of a bumper U.S. data week.
Shares in Philips jumped 6.5 percent after thehealthcare, lighting and consumer appliances group reported anear tripling in its third-quarter net profit.
Investors were also encouraged by numbers from paints andchemicals company AkzoNobel, which rose 9 percent,with analysts at ING saying that conservative full-year guidanceleft room for upside surprises.
German business software company SAP gained 5.3percent after maintaining its full-year outlook, despitecurrency risks.
"The sell-side is still very pessimistic on Europeanequities ... We think that is a bit too pessimistic given thatthe outlook for the euro area is that growth will pick up fromhere, so we see some nice potential in European equities," saidPeter Garnry, equity strategist at Saxo Bank.
Although the European third-quarter results season is lessthan a tenth of the way through, the early numbers have beenfairly positive, with earnings on average 3.3 percent aboveforecasts, in contrast to a broadly in-line performance in theUnited States, according to Thomson Reuters StarMine.
"The drivers for Q3 are mixed: the macro backdrop indeveloped markets has improved further, and leading indicatorsfor the euro zone in particular have seen a synchronised upturn,but emerging markets have deteriorated," analysts at UBS said ina note, highlighting Pearson, Melia Hotels andITV among stocks that could surprise on the upside.
"Elsewhere, FX becomes a headwind; commodity prices havepicked up, which should provide some support to the miners; butour oil & gas team expect a tricky results season ahead."
The FTSEurofirst 300 was flat at 1,277.88 points by 0958GMT, after hitting fresh five-year highs.
Data from EPFR showed European equity funds enjoyed theirbiggest weekly inflows in two years in the week to Oct. 16.
"If you look at equities versus the alternatives it's stilla good long term bet and people are buying into the strength,"said Pieter Fourie, head of global equities at Sanlam PrivateInvestments, whose top picks include France's LVMH.
"Throughout the year we've become more constructive onequities in terms of our asset allocation because clearly at themargin economic numbers are holding up quite well ... and wewant to position ourselves for the next 18 months to 3 years."
Traders said markets were likely to be jittery pending aslew of delayed U.S. economic data, starting with existing homesales on Monday and including non-farm payrolls on Tuesday.
A last-minute U.S. fiscal deal has averted the risk of asovereign default for now, enabling the government to reopen andending a near three-week drought of official data releases.
The delays in the data coupled with the economic falloutfrom the government shutdown are now expected to push back anypolicy tightening from the U.S. Federal Reserve, to the reliefof equity markets where investors have recycled much of thecheap Fed cash.
"Uncertainty is still there but it's less than it was ... wehave had the (U.S. debt) deal and we've reached new highs, ourexpectation is still that we will have a year-end rally," saidSaxo's Garnry. "Unless the macro data suddenly turns negative Idon't see the risk of major drawdown in equities."
- Europe News