* FTSEurofirst down 0.4 pct, Euro STOXX 50 down 0.8 pct
* Weak U.S. data casts shadow on best weekly gain in 5 months
* PPR drops 6.8 pct pct after sales miss
By Francesco Canepa
LONDON, April 26 (Reuters) - European shares fell on Friday as some downbeat corporate results and disappointing U.S. economic data cast a shadow, though a regional benchmark index posted its best weekly gain in five months.
The pan-European FTSEurofirst 300 index closed 0.4 percent lower on the day at 1,196.41 points but was still up 3.8 percent for the week, its best performance in five months, on mounting expectations that the European Central Bank will cut interest rates next Thursday.
French fashion firm and luxury goods group PPR was among the top losers - dropping 6.8 percent in volume three times the average for the past 90 days, after its first-quarter sales missed forecasts.
Bucking the trend was German chemical group BASF, up 3.8 percent in three times its volume average after saying it expects sales and operating profit growth in all its business divisions this year.
Thomson Reuters StarMine data showed 51 percent of the STOXX Europe 600 companies that have announced results so far have missed analysts' forecasts.
The FTSEurofirst 300 extended losses in the afternoon as data showed U.S. economic growth was lower than expected in the first quarter, striking a cautious note ahead of the non-farm payrolls report next Friday.
"Next week is probably when I'll make up my mind," said Manish Singh, director and head of investment services at Crossbridge Capital, who has positions in European financial and pharmaceutical stocks.
"If we get a bad set of data then you have to cut your positions because it could play into the crowd thinking of 'sell in May and go away'."
The STOXX Europe 600 index has fallen by an average 0.80 percent in May over the past 10 years, data from brokerage BTIG showed.
The index is up 0.6 percent so far this month and a positive close would mark its ninth consecutive monthly gain, the longest winning streak since 1996-97, strengthening the call for a May correction according to traders.
Daily technical charts on the Euro STOXX 50, down 0.8 percent at 2,683.43 points, showed the index was poised for a strong end to the second quarter but the picture further out was duller.
Philippe Delabarre, a technical analyst at Paris-based Trading Central, said the Euro STOXX 50 was in a bullish pattern, known as a descending broadening wedge, which tends to be followed by a breakout to the upside.
He sees technical resistance at the index's March top at 2,740 points, which also corresponds to the upper limit of a recent range and so could trap the index in the longer run.
"From a mid-term perspective, a consolidation channel is taking shape," Delabarrre said.
RATE CUT BOOST
An interest rate cut by the ECB on Thursday, however, could give new impetus to the rally by helping stimulate the struggling euro zone economy and possibly ushering in a gradual softening of Germany's stance towards southern European countries.
"The real effect needs to be to get banks to lend, to encourage government to work on stimulus measures and stop being so completely focused on austerity," said Lorne Baring, managing director of wealth manager B Capital in Geneva.
"That has started to happen. There is definitely a relaxation process underway and that is what is needed to give some back to European equities."
Crossbridge Capital's Singh cautioned this was unlikely to take place before the German election in the autumn, when Chancellor Angela Merkel will have to face the growing opposition at home to concessions to Germany's southern partners in the euro zone.
"I'm still playing safe in Europe but if you start to see they move away from austerity and start reflation, clearly Europe will do better because it has been underperforming for the whole of the first quarter and second quarter," Singh said.
"It would be the theme for the second half of the year, rather than now."