European shares closed weaker yesterday as patchy results and mixed outlooks from financial heavyweights including BNP Paribas and ING dragged indexes lower.

Technology issues also weighed following a disappointing outlook from wireless technology company Qualcomm and an uninspiring update from mobile phone giant Nokia.

The FTSEurofirst 300 index of pan-European blue chips closed 0.2 per cent weaker at 1,016.6 points, having hit a six-month peak the previous session on news of President George W. Bush's re-election.

The narrower DJ Euro Stoxx 50 index closed steady at 2,859.5 points, with both indexes ending off their lows after US blue-chips rose for the seventh session in eight.

Sluggish demand from euro-zone consumers, particularly in Germany, and a slowing global growth outlook meant the prospects for a sustained European rally looked unlikely, said Mike Turner, head of global strategy at Aberdeen Asset Management.

"The window of opportunity for the European economy to shift up a gear has passed, really, in terms of domestic demand and external demand hitting a sweet spot together."

However, analysts earnings' expectations for next year are holding firm, leaving valuations looking undemanding.

"European equities look increasingly cheap but there's zero fund flows," said Simon Hallett, a European fund manager at Baring Asset Management.

"The only net buyers of European equities are the companies themselves with their stock buy-back programmes, so there's a lot of liquidity around," Mr Hallett said, adding that bonds looked expensive.

"The yield on the (European equity) market is about three per cent and you get about 3.9 per cent on a German 10-year bond. You could find a basket of reasonably secure-yielding European equities yielding north of four per cent I would guess, so valuation against bonds looks very attractive."

European government bonds were firmer yesterday but little moved by both the European Central Bank and the Bank of England leaving interest rates unchanged. As expected, rates remained at two per cent and 4.75 per cent, respectively.

In New York, the blue-chip Dow Jones industrial average was 0.6 per cent higher at 10,199.2 points, while the Nasdaq Composite Index rose 0.1 per cent to 2,005.5 points by 1714 GMT. Qualcomm was down four per cent after it set an earnings target below Wall Street forecasts.

Unconfirmed reports from Israeli television that Palestinian President Yasser Arafat was clinically dead came in as European markets closed but had little obvious impact.

Around Europe, London's FTSE 100 closed up 0.2 per cent, Frankfurt's DAX closed up 0.1 per cent, while Paris's CAC-40 fell 0.2 per cent. Zurich's SMI ended 0.2 per cent firmer.

Among tech stocks, Nokia ended 0.9 per cent lower at €12.25 following its capital markets day in New York. The mobile phone giant said it planned to launch more new handsets next year and take market share but expected the handset market to slow.

Franco-American software firm Business Objects was down 17 per cent after missing third-quarter earnings and giving disappointing guidance.

Dutch financial group ING ended 1.6 per cent lower despite posting a 28 per cent rise in third-quarter core profits. Some investors were disappointed by results at ING's banking unit.

BNP Paribas fell 0.7 per cent following comments that the bank's environment had deteriorated despite a rise in third-quarter earnings.

Oil stocks outperformed following a bounce in crude prices back near $51 a barrel overnight although US light crude fell back to around $50.50 a barrel late yesterday.

Eni, BP and Total rose between 0.9 and 1.7 per cent.

Elsewhere, Danish brewer Carlsberg closed down five per cent after cutting its full-year forecast due to disappointing results in Sweden.

Shares in Smith & Nephew rallied 10 per cent after the British medical devices firm beat expectations with a 15 per cent rise in earnings per share for the third quarter.

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