A new retreat in oil prices and Credit Suisse's ambitious earnings targets helped European shares rebound yesterday, but mixed economic data and a fall by the dollar to a new low kept a lid on market gains.

French reinsurer Scor slid six per cent after a US jury decided to treat the September 11 destruction of the World Trade Centre towers by hijacked airliners as two separate events.

Scor said it would fight the court decision, which it deemed contrary to the terms of the insurance coverage.

By 1650 GMT, the FTSE 300 index of pan European blue-chips had risen 0.4 per cent to 1,035.44, snapping a two-session losing streak which pushed the index down one per cent. The narrower DJ Euro Stoxx 50 index gained 0.5 per cent to 2,918.4 points.

A new sharp fall in US oil prices helped some companies, with fuel-hungry airline Iberia climbing 1.2 per cent, even though market watchers said the retreat of crude prices to three-month lows may not last.

There were concerns that oil cartel Opec may seek to clamp down on excess supply that has helped push prices lower.

Market sentiment was buoyed after the ZEW research institute's gauge of German investor confidence edged up unexpectedly in December as a drop in crude prices helped offset concerns about the impact of the strong euro on the key export sector.

"There are some signs that domestic demand is past its worst point and the ZEW may be reflective of that," said Ken Wattret, economist at BNP Paribas in London.

But US reports painted a mixed picture for economic growth as data showed business productivity in the world's largest economy had grown more slowly in the third quarter than first thought, while chain store sales fell in the crucial shopping period after Thanksgiving.

Across Europe, Frankfurt's DAX share index was up 0.45 per cent, London's FTSE rose 0.12 per cent and Paris's CAC-40 gained 0.53 per cent. In Zurich, the SMI put on 0.73 per cent.