European stock markets mostly rose late yesterday, buoyed by gains in large-cap oil stocks and volatile insurers, with Germany's Allianz leading the way up on talk it planned to sell its Dresdner Bank unit.
London bucked the firmer trend as fears about the health of the UK housing market weighed on heavily-weighted banking stocks such as Lloyds TSB, and HSBC.
Also underperfoming was Helsinki after the initial relief from a shock-free Nokia trading statement faded and investors sold the stock on concerns handset sales would be hit in the second quarter.
By 1545 GMT, with only Frankfurt still trading, the FTSE Eurotop 300 index of pan-European blue chips was up 0.5 per cent at 850 points and the narrower DJ Euro Stoxx 50 index was up 0.9 per cent at 2,409 points.
Among national benchmarks, the French Cac-40 closed up 0.9 per cent and the late-trading German Dax index rose 1.1 per cent along with most other markets, except for Britain's FTSE 100 and the Helsinki General Index which both fell 0.4 per cent.
Overall trading volumes were high. Technical analysts said the market had run out of puff after the Eurotop 300 benchmark closed at its highest level in almost five months on Friday and came off sharply on Monday, but remained broadly optimistic.
"The markets are looking a little tired and we could shuffle lower over the next couple of weeks," said Elizabeth Miller, a chartist at Red Tower Research.
"But dips still represent buying opportunities since they represent a correction in a bull move - the pause that refreshes," she said.
Shares in Allianz led the blue-chip climbers with a gain of 6.2 per cent as investors reacted to market talk of a possible tie-up between its subsidiary Dresdner Bank and Bank of America .
A spokeswoman for Allianz declined to comment and market players played down the chances of a tie-up.
Heavily-weighted oil stocks such as BP, Shell and Total lent support after crude prices hovered near 12-week highs ahead of an Opec ministers meeting, despite signs that high oil prices and low stocks in the West would stay the cartel's hand on cutting output.
Elsewhere, German chipmaker Infineon jumped 6.1 per cent, bolstered by news it and computer giant IBM had taken a key step in developing a new kind of memory which could see computers booting up instantaneously.
European telecom equipment makers Alcatel of France and Ericsson of Sweden added 3.8 per cent and 4.8 per cent respectively, after diving on Monday in reaction to a profit warning from US peer Motorola.
But bigger rival Nokia of Finland retraced its intial gains and eased 0.6 per cent.