Tech stocks nudge European shares higher at close

European shares closed slightly higher yesterday in a choppy session, rising for the fifth consecutive day, with gains in technology stocks overshadowing losses in the banking sector.

The pan-European FTSEurofirst 300 index of top shares edged up 0.48 points or 0.1 per cent to 988.33 points, having traded within a 14 point range reaching 993.85 at best.

The index, which fell 45 per cent in 2008, is up nearly 19 per cent this year - 53 per cent above a record low last March.

But, it is still down almost 15 per cent from its level just before the collapse of Wall Street firm Lehman Brothers a year ago that accelerated the global credit crisis.

"I don't think there is an awful lot out there driving it. It's just volatile trading in a general positive uptrend," said Peter Dixon, an economist at Commerzbank.

Across Europe, the FTSE 100 index was down 0.3 per cent, Germany's DAX was up 0.4 per cent and France's CAC 40 was down 0.01 per cent.

Technology shares were among the major gainers. ASML, the world's top maker of semiconductor lithography was up 2.2 per cent after it increased its sales outlook, thanks to improving operations in some chip markets.

Nokia, Alcatel-Lucent, Infineon and ARM Holdings gained 0.5 to three per cent. Software stocks were higher, with SAP up 2.7 per cent after Bill McDermott, president of SAP's global field operations, said the company would stay vigilant on costs and added that SAP can achieve a higher market share and higher profitability at the same time.

Autonomy and Cap Gemini were up 1.6 to 2.6 per cent.

Bank stocks took most points off the index. Banco Santander, BNP Paribas, HSBC and Société Générale were down one to 2.3 per cent. General retailers were lower.

Home Retail fell 6.7 per cent as investors took profits after Britain's biggest household goods retailer reported better-than-expected second-quarter sales at both its Argos and Homebase businesses.

"Home Retail and retailers in general have had a very good run over the last few weeks and I think investors are finding any excuse possible to take profits at the moment.

That's what appears to be happening with Home Retail," a trader at KBC Peel Hunt says. Energy stocks fell as crude lost 0.5 per cent. BP, Repsol and Tullow Oil was down 0.5 to 1.2 per cent.

Mining stocks retreated as metal prices slipped. Copper was down 1.8 per cent, aluminium fell 1.8 per cent and nickel lost 3.5 per cent.

Anglo American, Antofagasta, Eurasian Natural Resources Corporation and Xstrata were down 0.3 to 3.2 per cent.

The Bank of England left interest rates at a record low of 0.5 per cent for the sixth month running yesterday and said it would keep its £175 billion asset buying programme in place.

Across Europe, the FTSE 100 index was down 0.3 per cent, Germany's DAX was up 0.4 per cent and France's CAC 40 was down 0.01 per cent.