European blue chips traded higher in late yesterday trade, driven by gains in tech stocks, but a lacklustre start on Wall Street and reinsurer Munich Re's near six per cent tumble weighed.
Wall Street's listless performance ahead of the Memorial Day holiday came despite stronger-than-expected US GDP data.
In Europe, a strong result from France's Carrefour supported food retailers and techs firmed as Finnish mobile group Nokia extended its gains from Wednesday, when analysts warmed to new handsets for developing markets.
Munich Re weighed on Europe's stock markets after it unveiled a fifth consecutive quarterly loss due to provisions for anticipated tax liabilities, disappointing analysts who had been expecting a return to profit.
Shares in the world's biggest re-insurer fell as much as 5.8 per cent, erasing over one billion euros from its market value and taking its losses so far this week to 11 per cent as investors feared the group might have to tap markets to shore up its capital base.
"The management has not been convincing about a capital increase and the market is punishing them for that," said one Munich-based trader.
Munich Re said it would not boost capital solely to satisfy ratings agencies following a downgrade from Standard & Poor's on Wednesday, a move Munich Re said was unjustified.
A soft performance on Wall Street cooled the positive sentiment after better-than-expected gross domestic product data for the second-quarter failed to boost stocks.
"The GDP numbers were very favourable and showed strong momentum and growth in some key areas. There were upward revisions for consumer spending and business investment, with the offset being the rundown in inventories," said Paul Ferley, assistant chief economist at Bank of Montreal.
By 1606 GMT, with only Frankfurt's DAX still officially trading, the FTSE Eurotop 300 index was up 0.36 per cent at 905, having traded as high as 912 earlier in the session.
The narrower DJ Euro Stoxx 50 index was 0.7 per cent firmer at 2,578 points. In New York, the Dow Jones industrial average was down 0.14 per cent while the Nasdaq Composite Index stood 0.35 per cent higher.
France's CAC-40 ended 1.3 per cent higher, London's FTSE-100 closed some 0.2 per cent down, below the key psychological 4,200 mark, and Zurich's Swiss Market Index was up 0.41 per cent.
European stocks have climbed strongly off their six-year lows of March, encouraged by the stronger economic data out of the United States and a generally well-received second-quarter earnings season.
Carrefour, the world's second-biggest food retailer, soared 5.5 per cent on strong volume after its first-half profit beat expectations. Carrefour said it was upping its sales growth target to more than six per cent for the full year.
Fellow supermarket operators were buoyed by the result, Dutch Ahold jumped 4.13 per cent and Germany's Metro some 2.6 per cent.
ABB was one of the day's top gainers, rising 11 per cent, after a successful convertible bond issue helped restore some financial respectability to the Swiss-Swedish engineering firm, which flirted with bankruptcy last year.
"The worst is over for ABB. Confidence is returning in management," said Claude Zehnder, market analyst with Zuercher Kantonalbank. "They needed the money and this is a good step."
The stock is up more than 80 per cent in the past two months. Shares in Dutch-Belgian banking and insurance group Fortis fell 3.7 per cent after the company disappointed investors yesterday with a lack of guidance and by reducing its equities exposure more than they had hoped.
British services conglomerate Rentokil climbed after beating market forecasts, rising 2.51 per cent. The company, which made a pre-tax profit of £200.5 million, increased its interim dividend by 10.8 per cent.
Europe's largest travel operator TUI rallied 5.15 per cent after an asset sale boosted its second-quarter result and said bookings were continuing to recover.