Arcelor lent some steel to European shares yesterday, helping the market hold its ground and fend off pressure from Deutsche Bank, record oil prices, and slower-than-expected US growth.
The FTSE Eurotop 300 index ended up 0.13 per cent at 981.99 points, with roughly three issues rising for every two that fell, though dealings remained moderate at best.
After chalking up its lowest close for the year on Monday, the pan-European blue-chip benchmark recovered to end the week up 1.7 per cent, though still down 1.5 per cent for the month.
But a bounce from oversold levels was inevitable, enabling stocks temporarily to overcome hurdles such as high crude oil prices while mostly steady company earnings helped as well, said Kevin Lilley, a fund manager at Royal London Asset Management.
"The results so far have been 70 per cent in line or better than expectations, with a few notable exceptions, with Deutsche Bank a bit weak today," Mr Lilley said.
"The market has bounced off support levels for the third time this year, which gives a reasonable amount of confidence it's well supported," Mr Lilley said.
Markets may not have enough certainty to move out of their tight trading range until after the US presidential election in November, he added.
Morgan Stanley investment bank said the stock market has been moving in the tightest trading range in 24 years, which typically favours less risky shares.
Defensive utilities, healthcare, energy and consumer staples were among the best performers yesterday.
The DJ Euro Stoxx 50 index ended 0.09 per cent higher at 2,720.05 points.
Shares in Deutsche Bank fell 2.3 per cent to €57.7 after Germany's top bank missed market forecasts with a 30 per cent drop in quarterly profit due to dwindling trading income at its investment-banking arm, but it reiterated its earnings goal.
Deutsche chilled the sector before a heavy batch of banking results next week in Europe, including Barclays and Credit Suisse whose shares fell 1.5 per cent and 1.7 per cent respectively.
The basic producers sector was strongest, up 1.6 per cent, driven by the twin engines of steel producer Arcelor and diversified mining groups Anglo American and Rio Tinto.
Arcelor, the world's largest steel maker, beat expectations by reporting a 40-per cent rise in first-half core profit on higher steel prices and increased cost savings.
Showing confidence in the outlook for its markets, Arcelor said it planned to raise steel prices in the fourth quarter, helping to send shares in rival producers higher as well as sending its stock up 1.2 per cent to €13.8.