European shares ended mostly lower yesterday when a five-day advance lost steam as heavyweight oil groups fell on softer crude prices, but British Telecom was buoyed by its promise of cost cuts.
Denmark's leading telecoms operator TDC was the day's top blue-chip casualty, dropping 8.5 per cent to 188.5 Danish crowns after its largest shareholder, US communications group SBC, said it would sell part of its stake.
A weak Wall Street and light menu of corporate news gave little direction to investors.
"The market has focused on a multitude of 'fears' in rapid succession - oil, interest rates, Iraq, China, terrorism," said Mika Toikka, an equity derivatives strategist at Credit Suisse First Boston investment bank.
"Now we are starting to see a clear sense of 'numbness' descending upon the market, which is also reflected in low trading volumes," Toikka added.
The market was entering the typically slow summer months, and the numbness is likely to persist in the near term, Toikka said.
Mining groups were also weak as base metals prices fell and Deutsche Bank cut its price targets on Anglo-American, BHP Billiton and Xstrata. Anglo's shares fell 1.8 per cent to end at 1,136 pence.
The FTSE Eurotop 300 index ended a fraction higher at 1,003.45 points, its sixth straight session of gains. The pan-European blue-chip benchmark is now only 2.6 per cent below its 22-month high of late April.
Declining issues outpaced advancers by roughly three to one, and volume was barely average.
The narrower DJ Euro Stoxx 50 index ended down 0.46 per cent at 2,787.39 points, with blue-chip indexes in London, Frankfurt , Paris and Zurich all closing lower, too.
"A lot of people want to be in the market, and they are waiting for lower prices, but at the moment it does not seem to happen, which is why there is very little going on at the moment," said Peter Luedke, trader at Merck Finck bank in Munich.
Dealers were also cautious today is expected to be a light trading day ahead of Wall Street's closure tomorrow for the state funeral of former USPresident Ronald Reagan.
British Telecom shares were up one per cent at 187-1/2 pence after it said it would cut more jobs and save £1 billion per year by 2008/09 after transforming its network under a five-year plan.
There was also some speculative interest in the sector, too, with talk that Cable & Wireless or France Telecom could be interested in midcap COLT Telecom, which closed three per cent higher at 88 pence.