European shares rose yesterday as gains in supermarket group Tesco, oils and utilities overshadowed declines in Philips Electronics and Vodafone, but indexes are still rangebound as interest rate concerns remain.
An expiry in futures and options contracts injected a volatile element into trading.
Britain's top grocer Tesco underscored its dominance of the UK sector with a forecast-beating rise in first-quarter sales and said it was continuing to increase market share.
Shares in the group, which takes about one pound in every eight spent in all UK shops, closed up two per cent at 268-1/4 pence after hitting a new high for the year.
Oil companies like Royal Dutch/Shell and BP were held aloft by crude oil prices hitting their highest level in 10 days after export outages in Iraq and Norway.
The utility sector flirted with 2004 highs as investors looked for steady earnings in a jumpy market, with French Suez and German E.ON the standouts.
Metal producers like Anglo-American were also strong, helped by gains in gold as investors ditched the dollar after a wider-than-expected US current account deficit.
The FTSE Eurotop 300 index closed 0.7 point higher at 1,009.61 points, with advancing issues barely outpacing decliners, but volume was heavy as trading linked to the derivatives expiries accumulated.
"There is a lot of jumpiness around, but we are reasonably positive on the markets right now as in the past week they have been very resilient in the face of bad news," said Michael O'Sullivan, a strategist at State Street Global Advisers.
For the week, the Eurotop 300 index was up 0.5 per cent. But it remains in the middle of a four-month-old range as investors look for clarity on the pace of likely US interest rate hikes at the end of the month when the Federal Reserve meets to discuss borrowing costs.
"Between now and the end of the month there is all these meetings like the Fed and handover in Iraq," Mr O'Sullivan said.
"We just need to get past them, and the earnings season will also be starting soon."
The DJ Euro Stoxx 50 index of euro-zone blue chips rose 0.5 per cent to 2,822.06 points.
Technology was weak, particularly software and chipmakers, the former hit by disappointing earnings and outlooks, while the latter sagged after a trade group report showed North American semiconductor capital equipment makers saw May orders stay about flat with April.
Traders also cited comments from Deutsche Securities' analyst Fumiaki Sato, who is credited with forecasting a collapse in the semiconductor market during the IT bubble.
Sato told Reuters it was time to move out of chip, PC and liquid crystal display (LCD) shares before those stocks plummeted on falling prices and a supply glut.
Europe's number three chipmaker, Philips, dropped 1.3 per cent to €21.35 but it was also depressed by news LCD maker AU Optronics Corp raised a less-than-expected $520 million in a share sale.
This was a bad omen for a $2 billion IPO by rival LG.Philips LCD - a joint venture between Philips and LG Electronics.
Shares in Misys fell 7.9 per cent to 197 pence after the British software firm said revenue and margins fell in the year to end-May and trading in its banking and securities division remained difficult. Rival Sage eased 1.4 per cent to 179-1/4 pence.