European shares recover to end flat as oils rise

European shares closed flat yesterday, recovering the day's earlier losses as Wall Street turned positive and a strong crude price boosted oil producers such as Royal Dutch Shell and Total.

Equity markets spent most of the day in weaker territory, with the insurance sector tumbling as investors lowered their exposure to the sector following a placement of Munich Re shares in the previous session.

But gains in tech stocks such as mobile handset maker Nokia helped to limit losses after upbeat forecasts from key supplier Texas Instruments Inc., the world's biggest maker of chips used in mobile phones.

Nokia rose 1.7 per cent. Software maker Getronics added 3.5 per cent and Atos Origin climbed 1.6 per cent after Societe Generale named it as one of its top picks for consolidation in Europe next year.

The retail sector was also firm, with Marks & Spencer up 3.7 per cent on talk that it would delay its January sale as trading conditions remained buoyant.

"It appears to show they are more confident about sales and margins," says a dealer.

M&S helped other retailers. Supermarkets group Tesco rose 2.4 per cent.

The FTSEurofirst 300 index closed 0.1 per cent higher at 1,266.6, having hit a 3-1/2 year intraday high of 1,273.53 on Wednesday before closing lower.

Oil producers' shares rose in late trade as the oil price climbed 1 per cent to nudge toward $60 a barrel, as cold weather forecasts stoked concern that consumers would burn through fuel stocks in the United States.

Shell added 1.6 per cent and Total gained 1.1 per cent.

The insurance sector fell 0.6 per cent with the vast majority of constituents weaker.

Banks were also weak but shares in HVB, which was taken over by UniCredito, rose 2.9 per cent after cutting its stake in Munich Re.

HVB on Wednesday reduced its stake in the reinsurer to 4.9 per cent from 7.9 per cent, winding down a potentially volatile investment in a deal worth around €803 million.