* FTSEurofirst 300 steady around 5-yr highs
* Philips, AkzoNobel, SAP rise after results
* European equities enjoy best weekly flows in 2 yrs -EPFR
By Toni Vorobyova
LONDON, Oct 21 (Reuters) - European shares steadied around five-year highs on Monday, bolstered by a crop of strong earnings but with investors reluctant to put on big bets at the start of a bumper U.S. data week.
Shares in Philips jumped 5.8 percent after the Dutch healthcare, lighting and consumer appliances group reported a near tripling in its third-quarter net profit.
Investors were also encouraged that German business software company SAP maintained its full-year outlook, despite currency risks, and by better-than-expected revenues from paints and chemicals company AkzoNobel. Their shares rose 5.1 and 5.8 percent, respectively.
"The sell-side is still very pessimistic on European equities ... We think that is a bit too pessimistic given that the outlook for the euro area is that growth will pick up from here, so we see some nice potential in European equities," said Peter Garnry, equity strategist at Saxo Bank.
Although the European third-quarter results season is less than a tenth of the way through, the early numbers have been fairly positive, with earnings on average 3.3 percent above forecasts, in contrast to a broadly in-line performance in the United States, according to Thomson Reuters StarMine.
"The drivers for Q3 are mixed: the macro backdrop in developed markets has improved further, and leading indicators for the euro zone in particular have seen a synchronised upturn, but emerging markets have deteriorated," analysts at UBS said in a note, highlighting Pearson, Melia Hotels and ITV among stocks that could surprise on the upside.
"Elsewhere, FX becomes a headwind; commodity prices have picked up, which should provide some support to the miners; but our oil & gas team expect a tricky results season ahead."
The FTSEurofirst 300 was flat at 1,277.75 points by 0720 GMT, after hitting fresh five-year highs.
Traders though said activity was likely to be jittery ahead of a bumper crop of U.S. data, starting with existing home sales on Monday and including the keenly watched non-farm payrolls report on Tuesday.
A last-minute U.S. fiscal deal last week averted the risk of a sovereign default for now, enabling the government to reopen and ending a near three-week long drought of official data releases. The delays in the data coupled with the economic fallout from the government shutdown are now expected to delay any policy tightening from the U.S. Federal Reserve, to the relief of equity markets.
"Uncertainty is still there but it's less than it was ... we have had the (U.S. debt) deal and we've reached new highs, our expectation is still that we will have a year-end rally," said Saxo's Garnry.
"Unless the macro data suddenly turns negative I don't see the risk of major drawdown in equities."
Underscoring the positive investor sentiment, data from EPFR showed that European equity funds enjoyed their biggest weekly inflows in two years in the week to Oct. 16.