European shares edged into weaker terrain at midsession yesterday as investors nursed gains of about two per cent so far this week, and looked to US data for their next steer.
German drug and chemicals group Bayer was a bright spot, its shares gaining 3.6 per cent to €17.49 on hopes that its Levitra male impotence drug may be launched in the US this year.
By 1043 GMT, the FTSE Eurotop 300 index was off 0.2 per cent at 821 points, with the DJ Euro Stoxx 50 index shed 0.21 per cent to 2,306 points.
US stock index futures indicated a higher opening was likely on Wall Street.
Chip-related shares were lifted by news that US chip equipment maker Novellus reaffirmed its guidance for the second quarter, despite data showing global chip sales slowed more sharply than expected in April.
Dutch chip equipment maker ASML was up four per cent at €8.18, while chipmaker Infineon rose 5.7 per cent to €7.40.
Autos also fared well as the euro lost some of its recent head of steam to take pressure of exporters whose earnings are hit by a too strong single currency.
Oils and foods led the blue chip decliners. Healthcare was also weak as Germany's Merck KGaA said it was ending efforts to produce two early-stage diabetes treatments, sending its shares down 5.6 per cent to €28.11.
The Eurotop 300 is edging towards the top of a trading range that began in early May, but analysts cautioned about the likelihood of big gains to come.
Deutsche Bank said unless Wall Street climbs sharply, the upside in European markets remains capped, even if the European Central Bank slashes euro zone interest rates next week.
"While there may be a temptation to price better times ahead if central banks ease further, we continue to believe the real upward move in equity markets must await evidence that growth really is improving," Deutsche Bank strategist James Barty said.
Among the day's other standouts, Danish wind turbine group Vestas jumped eight percent to 54 Danish crowns after a broker raised its rating on the stock following a briefing.
Shares in Europe's biggest travel operator TUI AG were up 3.6 per cent at €11.35, extending a week-long gain to nine per cent as investors anticipated recovery in a battered industry. Airline shares were also higher, with Deutsche Lufthansa up 4.3 per cent at €9.23.
The final University of Michigan US consumer sentiment index for May is due at 1345 GMT, followed 15 minutes later by the Chicago PMI index which offers a snapshot of America's manufacturing heartland.
Economists forecast the Michigan index to come in at 92.6. The Chicago PMI, which is expected at 48.8, a slight increase on the prior month.
The PMI is considered a precursor to the US Institute of Supply Management index, due on Monday.