European shares ended flat yesterday as continued concern over the impact of rising oil prices on corporate earnings were offset by gains in French insurer Axa and food giant Nestle.
The FTSEurofirst 300 index closed unofficially up 0.02 per cent at 1,084.72 points, halting a three-session losing streak from last week's 32-month peak.
The DJ Euro Stoxx 50 index ended unofficially off 0.04 per cent at 3,026.8 points.
Nestle stock gained 0.96 per cent after the Swiss food giant pledged to buy back one billion Swiss francs worth of its own shares and set an 11 per cent higher dividend as margins improved in 2004.
"They've cut debt, the margin progression is good and the share buyback is good news as well," one senior trader said.
Axa gained 1.9 per cent after 2004 net profit more than doubled, beating forecasts, and the French insurer proposed raising its dividend by 61 per cent.
"The results are very, very good," said analyst Erwan du Halgouet at Oddo Securities. "The operating profit is better than expected, and the embedded value is also a bit above expectations. The results are good in all the categories."
Shares in German rival Allianz also propped up the DJ Euro Stoxx 50 index, up 1.4 per cent.
Elsewhere among financials, Germany's HVB added 5.5 per cent on news of job cuts and other cost cutting that would have a positive impact on 2005 results.
"(HVB) are saying the core capital ratio will go towards seven per cent again, that is a positive and might help them avoid a rating agency downgrade," said one market analyst.
A Fitch Ratings analyst said he would reaffirm his credit rating for HVB after the bank released full-year results, but added he was not convinced about HVB's ability to improve its finances.
Shares in Capgemini rose 6.7 per cent after Europe's largest computer consultancy forecast higher revenues and profitability this year and pledged to revive its loss-making US business.
Alliance UniChem, down 7.2 per cent, was among the biggest fallers after the UK drug distributor and retailer posted a surprise slowdown in sales in the second half of 2004, taking the shine off strong underlying profit growth.
The utilities sector continued with its losing streak, down for the sixth session out of the past seven as investors switch out of the hitherto outperforming sector.
Rising bond yields offer safer returns than those in the traditional, safe-haven, high-yielding sector, especially as some companies disappoint, dealers said.
Among weaker utilities, RWE was a large decliner, down 3.4 per cent after the firm posted in-line 2004 results, but forecast a single digit percentage rise in net profit this year, slower than analysts had expected.
UK gas and electricity utility Centrica dropped 1.5 per cent as concerns over deserting customers overshadowed a 16 per cent rise in annual profit that beat market expectations.
Meanwhile, the construction sector was also under pressure as UK glassmaker Pilkington and French rival Saint-Gobain fell on news that European Union anti-trust officials had raided glass makers in six European countries on suspicion they had acted as a cartel by fixing prices.
In the wider market, oil prices came off their four-month highs but were still trading over $51 a barrel. High oil prices bump up costs for many companies.
Signs of dollar weakness amid worries about whether the greenback could sustain a two-month rebound also capped stock market sentiment.
As bourses shut, in New York the Dow Jones industrial average was flat at 10,676 points, while the Nasdaq Composite was also little changed at 2,029 points.