European stocks end flat

European equities bounced from the day's lows to end flat yesterday, supported by a rise in heavyweight oils, while software giant SAP rallied 3.4 per cent after it forecast solid revenue growth.

Gains in Wall Street after conglomerate General Electric gave a bright outlook on the economy, also steadied the markets.

French cosmetics firm L'Oreal led the list of losers after its sales data fell short of expectations.

The world's largest beauty products maker said weakness in Europe led to a smaller-than-expected 3.6 per cent rise in first-half underlying sales.

L'Oreal shares, downgraded to "neutral" from "buy" by UBS, fell 4.4 per cent to €61.75.

Energy stocks outperformed after oil prices held firm above $40 a barrel. BP was up 2.0 per cent, Shell gained 1.2 per cent and rose 1.1 per cent.

Standout gainers included British brewer and pub owner Greene King, which surged 5.8 per cent after agreeing to buy 432 neighbourhood pubs from privately owned Laurel for £654 million.

The FTSE Eurotop 300 index of pan-European blue-chips ended little changed at 985.0 points.

The index has fallen in seven of the past eight sessions as investors worry about slower corporate profit growth after a slew of US warnings, mainly from tech firms.

"The market trend seems to be down, and there's no real reason to be a buyer. The lower we trade, markets are attracting sellers," said Tom Hougaard, chief market strategist at financial bookmakers City Index.

He said technology stocks could, however, see some bounce-back after the sharp falls in the week.

Around Europe, the UK's FTSE 100 rose 0.3 per cent, Frankfurt's DAX was down 0.2 per cent, the Paris CAC 40 was flat, and the key Swiss index fell 0.5 per cent.

Strategists said markets were expected to be under pressure due to concerns over earnings growth as the results season kicks off in earnest next week, with Nokia reporting figures on Thursday.

"We've changed our view for about the first time in 15 months on European equities to a more bearish stance," Credit Suisse First Boston strategist Bill McQuaker said.

Valuation concerns, particularly for volatile and economically sensitive stocks, plus a slight softening of recent data as well as negative newsflow from US companies had contributed to the weakness, he said.

"All these things are kind of marginal, but together they are having a bit of a negative impact," McQuaker said.

Meanwhile, British corporate telecom service provider Thus Group sank 19 per cent to its lowest level in a year after issuing a cautious outlook statement and on concerns about its margins.