European shares pause for breath near 4-1/2 yr peaks

* FTSEurofirst 300 down 0.05 pct

* Fresh gains seen after a pause

* Dividend hike boosts Antofagasta

By Toni Vorobyova

LONDON, March 12 (Reuters) - European shares held steady on Tuesday, taking their cues from a mixed showing on Wall Street and pausing for breath before what technical analysts say could be a push to new multi-year highs.

After hovering either side of the no-change mark, the pan-European FTSEurofirst 300 ended the day down less than a point at 1,194.02 points.

The pan-European index set a 4-1/2 year high of 1,197.73 at the end of last week, bolstered by a series of record highs on the U.S. Dow Jones Industrial Average, which was down 0.1 percent at the European close on Tuesday.

"There is a clear improvement among the European indexes during the last months and that is still running," said Achim Matzke, technical analyst at Commerzbank.

"We have seen several days with new all-time highs on Wall Street so it is not surprising to see it pause for a day. But I expect the bull market in U.S. equities to continue, and that to also help European equities."

Matzke forecast that the EuroSTOXX 50 index of euro zone blue chips, which closed 0.3 percent lower at 2,711.85 points on Tuesday, could reach 2,900 points this year.

The macro news flow continued to underline ongoing risks, with Bundesbank chief Jens Weidmann saying that the euro zone crisis "is not over despite the recent calm on financial markets" and continued political wrangles over the U.S. budget.

But investors kept snapping up European equities on any signs of weakness, as they have done recently, sending the FTSEurofirst 300 back into positive territory more than 10 times in the course of a jittery session on Tuesday.

"The positive momentum is definitely still there," said Stephen Walker, head of equities research and market strategy at wealth management firm Ashcourt Rowan.

"There's obviously quite a lot of people who have been caught out by this move ... People who manage big pots of money are pretty tightly benchmarked so they get to a stage when they just get dragged into the market, regardless of what they think, and you just get that weight of money."

Among individual stocks, copper miner Antofagasta was one of the top gainers after saying it would pay 98.5 cents a share on 2012 results - more than double the previous year's dividend.

"Solid result and the market always like to see excess cash returned to shareholders," analysts at Liberum Capital said in a note, reiterating a 'hold' rating on the stock.

They added they "would be outright buyers but (the stock) remains expensive versus its diversified peers trading on 16.9 times 2014 price/earnings versus sector on 10.8 times".

Shares in Antofagasta added 3.1 percent, building on a gain of 2.4 percent the previous session, when analysts at Societe Generale flagged the possibility of the bumper payout.