European stocks ended yesterday's session a touch higher as lacklustre banking stocks were offset by gains in miners and oil producers as worries about Iran helped nudge crude higher.
Among major movers, Lloyds TSB sank after analysts said its rate of revenue growth had slowed, despite the bank meeting its earnings forecast, while Germany's RWE edged higher after its results beat analysts' forecasts.
"European earnings momentum remains positive. Upgrades continue to outnumber downgrades," said Dresdner Kleinwort analyst Andrew Lapthorne in a report. "The industrials continue to deliver positive news."
The FTSEurofirst 300 index of top European shares closed up 0.2 per cent at 1,543.71 points, ending broadly flat for the week.
Around Europe, Britain's FTSE 100 added 0.3 per cent and France's CAC 40 gained 0.2 per cent. Germany's DAX rose 0.3 per cent, shrugging off the Ifo index of business confidence which fell more than expected this month.
"We've gone without a two per cent correction since June, and the market will look for an excuse to take profits. Iran is moving to the forefront, and with it, oil," said Philippe Gijsels, senior equity strategist at Fortis Bank in Brussels.
Crude oil climbed above $61 a barrel to its highest this year after the US reported an unexpected drop in fuel stocks and Iran's President Mahmoud Ahmadinejad said the country should not show weakness over developing its nuclear programme.
Oil producers gained, with BP up 2.7 per cent and Royal Dutch Shell adding one per cent. Finnish refiner Neste Oil added 4.3 per cent after Goldman Sachs raised its recommendation to neutral from sell.
Miners were also buoyant, with BHP Billiton up 1.3 per cent and Rio Tinto 1.5 per cent higher as copper rallied.
The prospect of higher fuel bills weighed on airlines, with British Airways down 1.1 per cent, while Deutsche Lufthansa fell 1.9 per cent. Cruise operator Carnival fell 2.1 per cent.
Banking stocks capped the market's gains, with Lloyds TSB down 3.4 per cent on concerns revenue growth remained modest despite an eight per cent rise in underlying annual profits.
Elsewhere in the sector, HBOS dropped 1.2 per cent and Societe Generale was down one per cent.
"Results from banks over the past few days have not been good with the exception of a few. French banks were especially poor and we have seen downgrades from brokers," said a trader.
Among other firms reporting earnings, RWE rose 1.5 per cent after its profit beat forecasts, and it said rumours it was interested in Scottish & Southern Energy were unfounded.
WPP, the world's second-largest advertising and marketing firm, added 1.6 per cent after beating forecasts and saying it expected to outperform advertising markets this year.