* FTSEurofirst 300 down 0.1 pct but on track for 3rd week ofgains
* AXA, Renault, Schneider join list of companies hit by FX
* Unexpectedly weak Ifo underscores growth concerns
By Toni Vorobyova
LONDON, Oct 25 (Reuters) - European shares steadied onFriday after a growing list of companies reported earnings hitby an adverse exchange rate, prompting investors to lock inprofits at the end of a third straight week of market gains.
A strong euro hit sales at French insurer AXA andcarmaker Renault, while prompting electrical gearmaker Schneider Electric to lower its full yearforecasts.
The euro has risen to 2-year highs on a trade-weightedbasis, with the currency strength making it harder for Europeanexporters to compete on price, as well as reducing the domesticcurrency value of their foreign earnings.
Weak earnings also weighed on home appliances makerElectrolux and truckmaker Volvo, down 7.5and 7.0 percent, respectively.
"The weakness of emerging currencies which we experienced inthe summer is clearly impacting earnings right now, because youhave a lot of guidance downgraded. It's the big issue for thisearnings season," said Benoit Peloille, investment strategist atNatixis.
"That's why we continue to push a value strategy oriented ondomestic stocks that are more reliant on the euro zone trendrather than on growth stocks which are exposed to emergingcountries. These stocks have benefited from premium valuations... so they are the most in danger."
The FTSEurofirst 300 was down 0.1 percent at 1,285.25 pointsby 1002 GMT, holding around 10 points below the 5-year highs hiton Tuesday, but still up 0.6 percent on the week.
With the pan-European index already up more than 13 percentsince the start of 2013 and in the running for its biggestannual gain four years, investors have been counting on apick-up in earnings to become the next driver of equity marketgains, taking over from central bank stimulus.
However, despite some bright spots, the latest resultsseason suggests the recovery has not yet happened, with some 43percent of the companies to have reported so far missingearnings expectations, according to StarMine.
Sentiment has also been bruised by expectations that atwo-week U.S. government shutdown this month will hit growth inthe world's biggest economy, while an unexpected fall in theGerman Ifo business climate index on Friday cast some doubtabout the strength of the recovery in the euro zone.
"We have come quite far (on equity markets) and the earningsare relatively mixed as they are coming out. We are slightlycautious going into the year-end," said Gautam Batra, chiefinvestment officer at Signia Wealth.
"We are looking for a turn in momentum to trim (holdings),and it will be probably across the board ... For us, the focusis very much protecting the gains."
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