* FTSEurofirst 300 up 3.17 points 1,283.16
* Miners, autos boosted by upbeat China data
* Daimler gets Q3 profit boost
* Earnings beats waning, pressure on valuations
* Ericsson, Gemalto fall as Q3 results disappoint
By David Brett
LONDON, Oct 24 (Reuters) - Mining and auto stocks liftedEuropean shares on Thursday after encouraging manufacturing datafrom big consumer China, but mixed earnings from companiestrading on high valuations capped gains.
Mining shares rose 0.6 percent after the flash Markit/HSBCPurchasing Managers Index (PMI) for China hit a seven-monthhigh, although volumes were comparatively lower than in thebroader market, suggesting investors were not fully committed tothe trade.
Societe Generale analysts sounded a cautious note on theoutlook in China, arguing that with growth stabilising after aslowdown policymakers seem to be shifting their focus back torisk management.
"The leadership still intends to delever the economy, whichis the main reason behind our call that the secular decelerationtrend is far from over," it said.
On the broader mining sector, UBS said in its commoditystrategy that it saw upside risks to its house view andconsensus on gold and silver in the year ahead.
Its preferred precious metals stocks boasted strong returnsand good cost control and included London-listed Fresnillo. Among industrial miners, UBS has a strong preferencefor low-cost producers with the potential to raise cashflowsharply, namely Rio Tinto and BHP Billiton.
Gains among miners helped the FTSEurofirst 300 rise3.17 points, or 0.3 percent to 1,283.16 by 1030 GMT, afterdipping 0.6 percent dip on Wednesday.
The index has rallied 35 percent since June 2012.
Auto stocks climbed 1.2 percent with most of thegains coming from German car maker Daimler.
Daimler jumped 2.3 percent after its results for the threemonths through September beat forecasts and it announcedfull-year profit would meet market expectations.
Nordic banks DNB and SEB, Swissindustrial group ABB and WPP, the world'slargest advertising company, also rallied after quarter results.
But after a strong start to the earnings season thepercentage of companies beating or meeting analyst estimates hasfallen to 53 percent from 63 percent earlier this week,according to Starmine data, which is roughly in line with thelast three-quarters.
Mobile telecom gear maker Ericsson (ERICb.ST ) led thetechnology sector lower, skidding 6.5 percent, and Dutch digitalsecurity services provider Gemalto GTO.AS shed 3.2 percent, bothhit by disappointing quarterly results.
"Earnings momentum is becoming a concern," Tim Whitehead,strategist at Redmayne-Bentley, said.
"Despite all the fundamental and structural problemsEuropean equities have done extremely well, and it could be thatthey mark time until expectations are met on earningsperformance and then you might get a further re-rating."
A strong run of gains has seen the Stoxx 600 re-rate on a price-to-earnings of 13.29 times against a 10-yearaverage of 12 times, according to Datastream, so focus isfalling on corporate earnings, which are under pressure tojustify the re-rating.
"So far, the year-to-date equity rally remains a multipleexpansion story and doubts arise on how sustainable this can bein case earnings revisions do not turn around any time soon,"Deutsche Bank said in a note.
- Company Earnings