European shares ended mixed yesterday with travel stocks hit, as investors feared pressure on corporate profits after crude oil hit new record highs, while AstraZeneca fell three per cent as it delayed a key drug.
Fuel-guzzlers British Airways lost 1.1 per cent to 207-1/2 pence and budget carrier Ryanair shed three per cent.
Shares in struggling German retailer KarstadtQuelle fell 9.5 per cent after private equity firm Blackstone said it was not considering a bid and Karstadt itself also said selling the group as a whole was out of the question.
By 1550 GMT, the FTSEurofirst 300 index of pan-European blue chips unofficially closed 0.04 per cent down at 1,015.4 points, snapping a three-day rally during which it put on three per cent. Market breadth was mixed with 153 shares declining while 130 stocks rose.
"We have had a good run-up in the last few sessions and though the high oil price is somewhat discounted, people are getting nervous," said the head of trading at a French brokerage.
The DJ Stoxx oil and gas sector notched up a fresh high for 2004 high, up 0.77 per cent, bringing its year-to-date gains to about 15 per cent.
"It still looks like there are no short-term catalysts for oil prices to go lower and supply worries remain," said Edwin Slaghekke, global fund manager at Theodoor Gilissen Bankiers.
The narrower DJ Euro Stoxx 50 index was up 0.06 per cent at 2,831.88 points.
Shares in Europe's largest car maker Volkswagen bucked the trend, rallying 7.9 per cent to €34.5 on hopes of further cost-cuts as it said a former DaimlerChrysler manager and restructuring expert would join the company.
Energy majors BP and France's Total rose 1.37 per cent and 0.77 per cent respectively as crude oil's rise to $51.70 a barrel, up more than 55 per cent on the year, stoked further hopes of robust profit growth by energy companies.
Amsterdam-based Slaghekke still fancied BP and Royal Dutch shares, besides being bullish on telecom stocks Deutsche Telekom and Spain's Telefonica on hopes of increased cash-flow generation in the sector.
US oil prices extended record-setting highs for US crude near $52 a barrel, fuelled by the impact of Hurricane Ivan on US winter inventories.
"If the recent upward shift in oil and other commodity prices turns out to be longer lived than some expect, forecasts for oil stocks may once again prove to be too conservative," European strategists at CSFB said in a note.
"At the same time, forecasts for companies exposed to commodities as input costs may be vulnerable."