European shares end steady

European share indexes closed little changed yesterday as the latest batch of corporate results failed to encourage fresh buyers and optimism in the technology sector was offset by weaker energy companies.

Automakers were in focus, with Italy's Fiat ending five per cent higher after it won a $2 billion payout from General Motors to give up a put option that it could have used to force the US giant to buy its loss-making auto unit.

"It's very positive, the best outcome for all concerned," said Carlo Gentili, partner at fund manager Nextam. "It avoids a drawn-out court battle which would have paralysed the company."

Germany's Volkswagen added 2.8 per cent after its 2004 profits beat forecasts but car parts firms underperformed, with tyre maker Michelin 1.7 per cent weaker after reporting disappointing sales on Friday.

Smith Barney cut its view on Michelin to "hold" from "buy" and also downgraded rival Valeo, to "sell" from "hold". Valeo shares ended 1.8 per cent lower.

By 1631 GMT, the FTSEurofirst 300 index of pan-European blue chips was unofficially closed 0.1 per cent firmer at 1,098.2 points, a fresh 32-month closing high.

Volumes were light and the number of stocks which fell marginally outnumbered those that rose.

The narrower DJ Euro Stoxx 50 index fell 0.3 per cent to 3,072.3 points.

The technology sector was one of the better performing, adding 0.7 per cent.

Strategists at SG Equity Research said valuations in the sector were now attractive, particularly for software companies like Germany's SAP.

"Software, as the tech growth component, has seen a massive derating over the past years, as has the overall growth segment itself. We advise investors to gradually reweight growth, at the expense of value and yield," SG said.

Semiconductor maker Infineon and Dutch chip equipment maker ASML lead the way higher after giant microchip maker Taiwan Semiconductor Manufacturing Co reported its first sequential rise in monthly sales in five months. ASML rose 3.5 per cent and Infineon closed up 2.1 per cent.

In New York, the blue-chip Dow Jones industrial average was 0.1 per cent lower at 10,781.2 points, while the Nasdaq Composite Index rose 0.1 per cent to 2,079.5 points.