Daimler slips, miners provide support as European shares pause for breath

LONDON (Reuters) - European shares inched higher on Thursday with investors less keen to chase the previous session's strong rally that came on the back of the relatively dovish tone struck by Fed chair Janet Yellen overnight.

The pan-European STOXX 600 was up 0.1 percent, in line with euro zone stocks and blue-chips, with rate-sensitive real estate stocks, which were top gainers on Wednesday, pulling back slightly.

On Wednesday, the European benchmark posted its best day since Macron's victory in the first round of presidential elections, as banks and yield plays rallied.

Souring sentiment somewhat, shares in Mercedes maker Daimler fell 1.5 percent to the bottom of the DAX after a report accusing the carmaker of selling cars with excess emissions.

However, continued strength among miners, which hit a near three-month high, supported the index.

Defence and engineering services firm Babcock led European gainers, up 3.6 percent after a positive trading update, leaving its full-year outlook unchanged.

Earnings began trickling in from a string of French companies.

Supermarket Casino gained 2.1 percent, leading the retail index which was among the strongest performers.

Spanish peer Dia also rose 2.4 percent.

Drugmaker Astrazeneca meanwhile was the worst European performer after a report Chief Executive Pascal Soriot was to be named CEO of Israel-based Teva Pharmaceutical Industries.

(Reporting by Helen Reid, Editing by Vikram Subhedar)