European blue chips firmed yesterday, powered by strong auto and technology stocks, after solid July US retail sales hinted at a further recovery in the world's biggest economy.
A sluggish start on Wall Street, however, pulled European stocks from their highs.
Heavily weighted oil stocks added further drag to European indices, as investors pocketed profits after the DJ European Stoxx energy sector index gained nearly seven per cent over the past week.
Analysts said European corporate earnings in the current reporting season, which was drawing to a close, had mostly pleased investors, especially in the banking sector. This, along with a strengthening dollar, contributed to positive market sentiment.
"The results in the US have been good, the results season in Europe has been OK, especially the banks in particular, which came in ahead of expectations," said Simon Goodfellow, European equity strategist at ING Barings in London.
"Certainly the pressure on European earnings is off since the dollar started strengthening again, (there are) no new causes for concern."
By 1353 GMT, the FTSE Eurotop 300 index was up 0.45 per cent at 881 points in thin volumes. The narrower DJ Euro Stoxx 50 index gained 0.28 per cent to 2,503 points.
Wall Street started lower with the Dow Jones industrial average 0.22 per cent lower and the tech-laden Nasdaq Composite unchanged at 1,686.99.
US retail sales rose 1.4 per cent in July versus average expectations for growth of 0.9 per cent.
"It looks very strong," said Citigroup economist Darren Williams.
"From an equities perspective, what's really important is that it is showing that economic growth is coming through, but the downside is that those sort of numbers are going to give bond markets the jitters and could force up long-term interest rates."
Heavyweight auto stocks found favour with hedge fund buyers, led by Renault, which gained four per cent, and BMW, up three per cent.
Better-than-expected results from German truck maker MAN pushed its stock as much as 8.16 per cent higher after its quarterly profit came in at the top of expectations.
German airline Lufthansa's second-quarter profit surprised the market with a profit despite expectations of a loss, and the stock gained nearly three per cent.
Banking blue-chip UBS, however, slid 1.9 per cent despite a better-than-expected first-half result, as the company warned the second half might not be so rosy.