European share prices rose yesterday as good news from financials Munich Re and Fortis encouraged investors to look past mixed US data and strong oil prices for now.
Dutch food retailer Ahold gained 4.8 per cent to six euros after the company's Chief Executive Anders Moberg told Reuters he was very confident of raising €2.5 billion from asset sales to pay down debt after its profit overstatement scandal.
But French engineering group Alstom slid 8.5 per cent to €1.08 after France accepted conditions to win EU backing for a €2.5 billion state bail-out of the ailing maker of TGV high speed trains and cruise ships.
The FTSE Eurotop 300 index ended up 0.8 per cent at 982.85 points, with the advance broadly-based as nearly four stocks rose for each one that fell, with volume steady at €2.5 billion.
The index is still locked in a range after hitting a 22-month high in April and a 2004 low last week amid concerns about 21-year high oil prices, and bets the US Federal Reserve will raise interest rates next month.
US oil prices stayed strong above $41 a barrel as the market fails to respond to leading Opec producer Saudi Arabia's promise to raise production sharply next month.
Markets are betting that the European Central Bank will have to raise euro zone interest rates to choke oil-led inflation.
"I think oil is a negative but probably its negativeness is overstated. We are in a dull period as people are rejigging towards a later economic cycle set up in their portfolios," said Nicholas Williams, a European fund manager at Singer & Friedlander asset management.
"I am not sure what is going to snap the market out of this range and would anticipate such a range for a while."
After last year's broad-based buying, investors were more selective to position themselves for higher interest rates, and Mr Williams liked "stable growth sectors" such as healthcare equipment.
The DJ Euro Stoxx 50 index ended up 1.1 per cent at 2,729.62 points.
Reinsurer Munich Re reported forecast-beating earnings, putting it on track to meet its 2004 forecast after its struggling insurance arm Ergo ended two years of losses.
Munich Re shares rose one per cent to €84.75. Elsewhere, Benelux bancassurer Fortis also reported a better than expected first-quarter operating profit as lower banking provisions outweighed the effects of a sale of its US insurance arm. The stock rose one per cent to €17.9.