European shares inch up on oils, US data weighs

European shares inched higher yesterday afternoon as global oil prices at $44 a barrel boosted heavily weighted energy stocks such as Shell and BP, while also fuelling concerns about the economy.

An economic report showing that US consumer spending had taken a much deeper dive than expected in June capped sentiment, as did Wall Street's weaker opening.

By 1340 GMT, the FTSE Eurotop 300 index of pan-European blue chips was 0.26 per cent firmer at 983.3 points, on a thin turnover of €1.3 billion ($1.6 billion). The narrower DJ Euro Stoxx 50 index rose 0.55 per cent to 2,711.64 points.

Equity markets remained dogged by worries that the best of red-hot US economic growth may be over and that global corporate profits may slow over the next few quarters. US oil prices at fresh record highs and a 0.7 per cent drop in personal spending in June in the world's biggest economy added to worries about the economic outlook.

"The spending numbers are weak, but this is neither surprising as weak retail sales had prepared us for today's numbers, nor alarming as this is only one month," said SG economist Olivier Gasnier.

"The crucial thing we need to see now is whether the employment recovery is confirmed over the months of July and August. If payrolls rise, the rest will follow in line."

In New York, the Dow Jones industrial average was down 0.14 per cent at 10,164.2, while the technology-laced Nasdaq Composite Index was down 0.32 per cent at 1,885.97.

BP was up 1.8 per cent, Shell gained 1.7 per cent in Amsterdam and 2.3 per cent in London, and Total added 1.7 per cent.

German tyre and car parts maker Continental and Swiss agrochemical group Syngenta were other bright spots, boosted by bullish broker notes, to gain 4.8 per cent and 3.3 per cent, respectively.

Europe's largest tourism firm, TUI, rose 3.8 per cent after giving a bullish outlook for its key German business.

But Royal Bank of Scotland fell 3.7 per cent after reporting first-half profits that only met forecasts.

Shares in British Internet bank Egg plunged 24 per cent after parent Prudential said it had failed to find a buyer after nearly seven months of talks. Prudential shares were down 2.6 per cent.