European shares ended mixed yesterday, despite solid earnings updates from carmaker Renault and bank HBOS, as concern over oil prices being at 21-year highs eroded market gains late in the session.

Anglo-Dutch consumer goods giant Unilever also weighed after second-quarter operating profits came in below expectations and traders worried about its ability to meet its 2004 guidance. Its shares fell 4.2 per cent in London.

"Equities move back into favour on a global basis," said Geoff Langham, head of trading at CMC Group. "However, the prospect of even higher oil prices and rising interest rates could push stocks lower once again in the mid-term."

The FTSE Eurotop 300 index of pan-European blue-chip stocks gained 0.34 per cent to end at 968.8 points, while the narrower DJ Euro Stoxx 50 index slipped 0.17 per cent to 2,666 points.

A batch of upbeat corporate results and forecasts by US and European companies has helped soothe investor worries about earnings prospects in the past two sessions. Such concerns had pummelled equity markets in recent weeks.

But market watchers said sentiment remained fragile, with investors more prone to price in negative news than positive developments.

Oil prices at $43 a barrel rekindled worries about the impact of high energy costs on economic growth and corporate profits.

Benchmark crude oil rallied after bailiffs ordered beleaguered Russian oil giant YUKOS to stop sales, which would place a further strain on tight international supplies.

A report showing that US orders for long-lasting durable goods had risen by less than expected last month also tempered optimism over the world's leading economy, even though economists said the numbers were far from alarming.