* FTSEurofirst 300 up 0.5 percent, up for 5th straight day
* Ericsson, Renault surge on strong earnings
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By Brian Gorman
LONDON, April 27 (Reuters) - European shares were headed for their highest close in eight weeks on Wednesday, after earnings from the likes of bellwether Ericsson beat forecasts.
At 1204 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,152.06 points, to be ahead for the fifth day.
"We have had a strong results season in the U.S. so far, and there have been no big problems in Europe, though it is early days," said Graham Secker, European equity strategist at Morgan Stanley.
Swedish telecom gear maker Ericsson's shares surged 9.6 percent after it blasted past first-quarter core profit expectations.
Elsewhere in the sector, Nokia rose 2.7 percent after the world's largest phone maker by volume said it would lay off 4,000 people and outsource another 3,000 to Accenture as part of a plan to slash annual spending by 1 billion euros ($1.46 billion).
Renault rose 4.7 percent after the French carmaker posted better-than-expected sales.
Drugmaker GlaxoSmithKline was up 1.7 percent after its results.
Analysts cautioned against reading too much into the direction of equities, until volumes picked up.
"Some of the liquidity has been due to pent-up demand for equities from big institutions, which have spent the last decade selling their equities, and buying bonds, and now realise bonds are not such a good investment," said Secker. "We think equities will move sideways for the next few months within a range."
Investors were awaiting clues from the U.S. Federal Reserve on an exit strategy from its support for the economy, with investors trimming their exposure to risky assets such as mining stocks. Heavyweights BNP Billiton and Anglo American fell 1.4 and 1.0 percent respectively.
The Fed was expected to stick to its plan to complete its $600 billion bond-buying program in June, but questions about the exit strategy will likely arise when chairman Ben Bernanke holds a news conference during which he may give hints on the central bank's thinking on the matter.
"If he was to open the door to QE3, equities would take that positively, but I do not think that will happen," said Secker. "If he was to talk about monetary tightening post the end of QE2, that would be taken negatively. I suspect he is going to fudge the issue and be as bland as possible."
European blue chips outperformed, rising 0.7 percent.
"We are seeing a flight to quality this week, with falling bond yields in the United States, Germany and France. Investors clearly want better returns and a protection against inflation, but they still do not really trust equities in general," said Marc Gilson, head of Paris-based fund management firm Fival.
OILS RISE
Energy companies gained as crude prices edged above $124 per barrel, supported by a weaker dollar. Sterling neared a 17-month high against the dollar, after data showed the British economy grew 0.5 percent in the first quarter.
BP rose 1.5 percent, buoyed by a more reassuring outlook, trader said, though first-quarter profit fell.
Total, ENI and Royal Dutch Shell rose 1.2-1.6 percent.
Not all earnings news was positive.
Barclays dropped 5 percent after the British lender's first-quarter profit fell on the back of lower income at its key investment banking unit.
Around Europe, Britain's FTSE 100 index was up 0.2 percent, Germany's DAX index up 0.8 percent, and France's CAC 40 up 0.6 percent.
Wall Street stocks were set to extend gains, having hit their highest in nearly three years on Tuesday, boosted by earnings from companies such as Ford. (Additional reporting by Blaise Robinson; Editing by Dan Lalor)