European shares drifted yesterday in wafer-thin dealings as Wall Street shut for Independence Day, but oil and telecom groups edged higher while investors hoped a new US earnings season would give rangebound indices a lift.
Oils rose as the price of crude jumped one per cent to $36.33 a barrel in London after a pipeline attack in Iraq cut exports, and concern grew that Opec producers may not hike output.
News that a group of creditor banks for Russian oil major YUKOS had declared the company in default on a $1 billion loan also raised the spectre of disrupted supplies.
Shares in oil firms such as Statoil, Total, BP and Repsol all gained.
But British Airways eased two per cent to 269-1/2 pence as concerns over higher fuel prices overshadowed a 4.2 per cent increase in June passenger traffic.
Irish no-frills airline Ryanair Holdings Plc saw a 24 per cent increase in its passenger numbers last month to 2.27 million, lifting the stock 2.3 per cent to €4.75.
Rival easyJet gained 0.8 per cent to 158 pence after a report that founder Stelios Haji-Ioannou might take the company private.
Elsewhere in the airlines and aerospace sector, Smith Barney upgraded its rating on UK defence group BAE Systems to "buy" from "hold", saying that risks attached to the firm were decreasing. The shares gained one per cent to 215-1/4 pence.
In addition to telecoms and oils, utilities, tobacco and real estate were among the stronger sectors yesterday.
The FTSE Eurotop 300 index ended off 0.1 per cent at 988.03 points, with three issues falling for every two that rose. Dealings totalled €1.3 billion, barely half the daily average.
The benchmark has been locked in a wide range for most of the year. The DJ Euro Stoxx 50 index ended virtually unchanged at 2,784,92 points.
Analysts said the market was waiting for the earnings season to kick off in the United States later this week, with US aluminium producer Alcoa and Internet portal Yahoo! reporting tomorrow, and General Electric on Friday.
Last Friday's figures showing much weaker-than-expected growth in US non-farm payrolls last month made it trickier to assess the way forward after the Federal Reserve raised US interest rates last Wednesday for the first time in four years.
"We believe this will now re-focus attention on the strong relative valuation case for equities and prompt a period of stronger trading through H2," Commerzbank said.
Lehman Brothers bank said positive earnings surprises in Europe will become less plentiful as global economic growth slows, and analysts have already bumped up their forecasts for earnings growth.