European shares ended yesterday on a steady note as investors bet the war in Iraq had been largely won by US-led forces, and drew comfort from better economic data, despite caution ahead of next week's key earnings reports.
Bourses enjoyed broad-based gains, spearheaded by insurers, technology and retail stocks.
German drug and chemical group Bayer gained 3.4 per cent to 15.35 euros on receding fears about its exposure to litigation over anti-cholesterol drug Baycol. British software group Sage jumped 11 per cent to 135 pence after it said first-half results were in line with market expectations, triggering relief in a sector bashed by many profit warnings.
"I think we will go up from here, but there won't be a huge buying frenzy, just two steps forward and one step back," said Lex Werkheim of Eureffect Asset Management in Amsterdam.
By 1535 GMT, with only Frankfurt still officially trading, the FTSE Eurotop 300 index was up 0.8 per cent at 800 points, with advancing issues outpacing decliners by three to one, though volume was moderate.
Stocks rallied on Monday as US troops entered Baghdad after more than two weeks of war, but markets gave up most of these gains later in the week as investors turned to the patchy economic picture ahead of next week when the US reporting season goes into high gear.
The Eurotop 300 index is up just 0.5 per cent for the week but still 17 per cent above its March 12 six-year closing low.
"The coming months we will see better economic numbers and more friendly indicators, but we will also see lot of bad news in between, making it a trading market," Werkheim said. Washington said yesterday that the government of Saddam Hussein has lost control over Iraq and "all but disappeared", although pockets of resistance remain from loyalists in Saddam's Baath Party.
The DJ Euro Stoxx 50 index rose 1.1 per cent to 2,248 points. In Paris, the CAC-40 gained one per cent to 2,838.14 points, while Frankfurt's DAX was up 1.44 per cent at 2,735 points. The Swiss index pushed 1.7 per cent higher to 4,448.1 points.
Wall Street initially rose on stronger-than-expected economic numbers but later turned cautious ahead of the weekend and next weeks' earnings, when results from European bellwethers like Philips Electronics and handset maker Nokia are also due.
The Dow Jones industrial average was off 0.12 per cent at 8,211 points, and the tech-laced Nasdaq Composite had shed 0.5 per cent to 1,358 points.
Telecoms were also firm after Dutch carrier KPN had its debt ratings upgraded, and as France Telecom clawed back some of its sharp losses on Thursday, having completed the sale of shares left over from a bumper rights issue.
KPN rose one per cent to 5.69 euros, and France Telecom added 3.4 per cent to 20.28 euros.
Meanwhile, Swedish telecom equipment maker Ericsson fell 4.2 per cent to 5.65 Swedish crowns after US investment bank Bear Stears cut its revenue forecasts for the company in 2003 and widened its loss-per-share prediction.
The day's key economic data sent a cheer among investors after a recent string of poor numbers.
US retail sales rebounded with surprising strength in March, posting their strongest showing since the fall of 2001, the government said in a report that should ease fears the Iraq war and rising gas prices would keep shoppers from the stores.
"Stronger retail sales data is good for stocks. It means we have better scope for recovery as the consumer is back in, starting to spend again," said David Brown, chief European economist at Bear Stearns.
The closely watched University of Michigan sentiment indicator added cheer, showing that US consumer sentiment improved markedly in early April amid signs that the US-led war against Iraq was coming to an end.