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European shares slip as AstraZeneca tumble drags indexes lower

* STOXX 600 down 0.1 pct

* AstraZeneca has weakest day ever as key study fails

* Earnings updates top focus today

* Roche, AB InBev and Diageo rise after results

* But Nestle results disappoint (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)

MILAN, July 27 (Reuters) - The biggest one-day drop in AstraZeneca shares following a drug study failure dominated stock trading in Europe on Thursday, outweighing a handful of well-received earnings results and sending indexes lower.

The British drugmaker fell 15.7 percent to its lowest level in almost five months after a closely watched advanced lung cancer trial failed, in what Morgan Stanley said was a "major setback" for the group.

Regional healthcare stocks fell 1.2 percent to their lowest in more than four months. Solid results from big firms including Swiss drugmaker Roche, beer maker AB InBev and Diageo were not enough to pull broad indexes up.

The pan-European STOXX 600 index fell 0.1 percent higher and euro zone bluechips edged down 0.2 percent, while Germany's DAX dropped 0.8 percent as results from BASF and Deutsche Bank underwhelmed.

Swiss stocks hit the day's high after the Swiss franc fell to its weakest against the euro since the currency cap was lifted in January 2015.

"Markets overall are flat as earnings are pretty mixed today," said AFS Group analyst Jauke de Jong.

Diageo, up 6.4 percent, provided the biggest boost to the STOXX after the maker of Johnnie Walker whisky and Smirnoff vodka raised its profitability target and announced a share buyback programme.

Roche gained 1.2 percent after it raised its 2017 outlook while AB InBev, up 5.5 percent, reported an increase in second-quarter earnings.

Thursday saw the heaviest day of European earnings in the current season, and by the end of the week about half the market-cap of the STOXX 600 will have reported earnings.

As of the previous day's close, a quarter of the companies on the MSCI Europe had issued results with nearly half of them beating profit expectations and 8 percent matching them. Results point to aggregate second-quarter earnings growth of 11 percent.

Deutsche Bank led banking stocks lower, falling 6.5 percent in its weakest day in five months after the bank lowered its 2017 revenue forecast due to a difficult second quarter.

Heavyweights BASF and Bayer dropped after lower than expected earnings, and a profit forecast cut, respectively, making the chemicals sector the worst-performing across Europe.

Elsewhere, French firms Elior Group and Imerys were among the worst performers on the STOXX 600 after AstraZeneca, following their respective results.

Nestle's results also disappointed. Its shares fell 0.9 percent after the world's largest food group trimmed its 2017 sales outlook, adding fuel to shareholder demands on CEO Mark Schneider to speed up a turnaround.

"It shows you that CEO Mark Schneider has a lot of work to do and there isn't a magic wand in terms of getting the top line going," said Jon Cox from Kepler Cheuvreux.

Despite a sharp drop in Siemens Gamesa shares, down 17.3 percent after missing expectations for its second-quarter earnings, Spain's IBEX held onto gains as Telefonica rose after hiking its revenue target. (Reporting by Danilo Masoni and Helen Reid; Editing by Alison Williams and Hugh Lawson)