European share indexes ended flat for a third session yesterday, with investors hamstrung by crude oil prices of over $53 a barrel, the European Central Bank cutting its growth forecast and caution ahead of today's US employment data report.
The drugs sector was in the spotlight with AstraZeneca and GlaxoSmithKline topping the gainers.
News from US regulators that AstraZeneca's cholesterol-lowering drug Crestor had been judged to carry no greater risk than related drugs sent the stock up 3.8 per cent.
GlaxoSmithKline rose 2.8 per cent after a broker report said its experimental cervical cancer vaccine Cervarix should rake in peak sales of $4 billion a year.
But Deutsche Telekom dropped 1.2 per cent as strong quarterly results were overshadowed by the German giant's British mobile phone arm T-Mobile UK, whose earnings and sales declined due to competition and regulatory price cuts.
Competitor 3 UK, the aggressive Hutchison Whampoa owned video phone pioneer, turned up the heat further by slashing the price of video calls in the UK yesterday as it wins customers from T-Mobile, Vodafone and France Telecom's Orange.
Shares in British Telecom and France Telecom fell about 1.5 per cent, though Vodafone edged up.
The FTSEurofirst 300 index of pan-European blue chips ended flat at 1,100.23 points, and still only about four points away from last month's 32-month peak despite the day's mixed bag of corporate and economic news.
The narrower DJ Euro Stoxx 50 index closed off just 0.15 per cent at 3,078.11 points as investors scoured the market for some good news.
"The earnings season has pretty much run its course and has disappeared as a driver. In the meantime, the oil price has weighed on the market a little bit and that is why we are looking for companies with pricing power," said Lars Kreckel, a European strategist at ABN AMRO bank.
The DJ Stoxx oil and gas sector index led gainers, reaching its best level in nearly three years as oil prices held near four-month highs. Britain's BP put on 1.2 per cent, and Royal Dutch/Shell gained 1.1 per cent in London.
For the broader market, high oil prices are a dampener as they stoke inflation and push up costs for many companies and consumers at a time when some economies are already slowing.
The ECB cut its economic growth outlook for the eurozone for this year to between 1.2 per cent and two per cent, down from the 1.4 to 2.4 per cent range projected three months ago, after a sputtering performance in the latter half of last year.
This is likely to put a eurozone rate hike on hold for some time, though analysts still expect the Federal Reserve to raise US rates further. Today's employment report may surprise on the upside and underscore expectations of more US rate rises.
"Everyone is just holding their breath for the payrolls as well," Mr Kreckel said.
The huge US services sector grew slightly last month while the country's jobs situation improved vastly, setting the scene for the employment data. This is expected to show a rise in non-farm jobs last month.
"This points to a very strong employment report tomorrow (today) - consensus is (a) 225,000 (rise in jobs), but we have been suggesting significant upside risk to this forecast all week," analysts at Dutch bank ING said.
Dutch insurer Aegon was a sore spot, down 1.7 per cent after its underlying results disappointed, though its 61 per cent rise in last year's net profits met market forecasts.