European shares closed higher yesterday after a volatile session, with index heavyweight BP leading energy shares up as its results beat forecasts, although US economic data limited gains.
The FTSEurofirst 300 index of top European shares rose 0.3 per cent to close at 999.64 points, after falling for three straight days.
The index had briefly turned negative immediately after US consumer confidence data, and had been up as much as 0.9 per cent earlier in the session.
The European benchmark index is up nearly 55 per cent from its lifetime low of March 9 as investors have become more confident on the prospects of economic recovery. "The sentiment had become too optimistic," said Giuseppe-Guido Amato, strategist at Lang & Schwarz.
"This is no more than a correction. We are seeing some erratic moves. The trend is still on the upside."
Mr Amato added: "We have liquidity. Because of lack of alternatives we will see money coming into the market."
Across Europe, Britain's FTSE 100 index ended the day 0.2 per cent higher, while Germany's DAX fell 0.1 per cent. France's CAC 40 was little changed.
Energy shares were among the top gainers.
Index heavyweight BP closed 4.8 per cent higher after beating third-quarter earnings forecasts by a big margin in a sign its restructuring plans were delivering results. Its cost cuts were ahead of targets, and its oil and gas output up strongly.
Total, Royal Dutch Shell, and StatoilHydro were up between 1.7 and 2.6 per cent as crude oil futures rose well above $79.
US consumer confidence fell to lower-than-expected levels in October amid growing concerns that job market conditions will worsen in the near term. The Conference Board said its index of consumer attitudes slipped to 47.7 in October from a revised 53.4 last month, which was originally reported as 53.1.
But US home prices in August rose for a fourth straight month, surpassing forecasts and providing the latest sign that the hard-hit housing market is stabilizing after a three-year slump, according to the Standard & Poor's/Case-Shiller composite index of home prices.
Share trading in Dutch financial services group ING was halted due to a high order volume after a record number of shares traded hands and the stock lost 6.1 per cent on dilution worries.
Due to the high trading volume, which amounted to almost 99.4 million shares compared to a daily average of 22.8 million, a technical error occurred. On Monday, when ING announced its rights issue plan and a split of the group into a separate bank and insurer, 91.6 million shares traded hands and the stock lost 18 per cent of its value. ING's breakup plan continued to weigh on shares of other state-aided banks such as Royal Bank of Scotland and Lloyds Banking Group, down 8.1 and 6.2 per cent respectively.
Other banks to fall included BNP Paribas, Barclays, HSBC, Société Générale and UniCredit, down between 0.8 and 3.6 per cent.
Wall Street was mostly higher around the time European bourses were closing. The Dow Jones and S&P 500 were up 0.6 and 0.2 per cent respectively.
The Nasdaq Composite was down 0.5 per cent.
Improved margins helped Dutch chemicals group Akzo Nobel overcome falling sales and post a surprise rise in third-quarter operating profit, but shares fell 6.3 per cent on nagging worries over the company's outlook.
On the positive side, Danish wind turbine builder Vestas ended 7.6 per cent up after it beat third-quarter profit expectations as input costs came off their 2008 peaks and stuck to its full-year 2009 guidance. Drugs giant GlaxoSmithKline rose 2.2 per cent ahead of third-quarter results on today.