US blue chip losses and renewed gains in the euro spoiled an otherwise positive session for European shares yesterday by dragging on German exporters and driving the late-trading Frankfurt market to a weak close.
Earlier, Britain's Lloyds TSB led banking stocks higher on asset sale hopes. Most other national and regional stock indices ended higher.
Some strategists suggested European shares had gained ground by default, hauled higher by Wall Street on growing expectations of a meaningful recovery in the world's biggest economy.
"If you're looking for upside in terms of the economics, the place to look is the United States because it is on the right side of currency trends and because it's had a big boost from lower short-term and long-term interest rates," said Bill McQuaker, a quantitative European equities strategist at CSFB.
"If it becomes apparent that the United States is beginning to recover, then that will drag us higher, too, because it will mean that the world is a better place."
His comment came after US GDP data confirmed a first-quarter pickup in economic growth and before volatile evening trading saw shares on Wall Street turn mixed and the euro rise sharply against the dollar, jeopardising corporate Europe's global competitiveness and export earnings.
The FTSE Eurotop 300 index of European blue chips closed up 0.13 per cent at 823.34, while the euro zone Euro Stoxx 50 index rose 0.06 per cent to 2,310.83.
The German Dax index closed down 0.44 per cent. Volumes were lacklustre with Nordic markets shut for the Ascension holiday.
On Tuesday morning the Eurotop 300 surrendered almost a third of its 20 per cent to 25 per cent gains since plunging to six-year lows in March. But it has since perked up thanks to gains on Wall Street and is now about 15 points off its recent highs.
Britain's Lloyds TSB rose 4.0 per cent on a report that the bank may sell its National Bank of New Zealand unit, which could be worth $3.9 billion. Lloyds declined to comment. Dollar-sensitive exporters such as chemical groups BASF and Bayer led the blue-chip loser board, and fellow Germans such as car maker DaimlerChrysler reversed earlier gains after the euro surged back toward all-time highs above $1.19.
Elsewhere, shares in British mortgage bank Abbey National rose 7.1 per cent. Dealers said the stock offered good value compared with the rest of the sector.
Shares in Italy's Benetton leaped more than 11 per cent after the group's new managers bolstered investors' confidence in the retail group and triggered a fresh round of talk about a real estate spin-off.
On the downside, Spanish travel distribution firm Amadeus fell 3.1 per cent after investment bank Santander cut its rating on the stock to "hold" from "buy."
Bearish comments from CSFB investment bank sent shares in British chemicals group ICI down 2.9 per cent, while UK pest control to security firm Rentokil sank 5.7 per cent as investors fretted about the firm's profit margins.
Shares in Italian soccer club Juventus sank 8.4 per cent after the club failed to recreate their domestic success in the Champions League, losing to AC Milan in the final.
In New York, both the Dow Jones industrial average and the broader Standard & Poor's 500 reversed initial gains and slipped to 8,753 and 952, respectively. The tech-laden Nasdaq Composite jumped 1.0 per cent to 1,578.
All three benchmarks closed at multi-month highs on Wednesday. Chartists said 965 on the S&P 500 and 9,000 on the Dow were critical hurdles for bullish investors.
"Those are the key levels that will finally bring on the buying panic - when they are broken," said Nick Glydon, technical analyst at JP Morgan.
Earlier data showed US economic growth picked up to an annual pace of 1.9 per cent in the first quarter, compared with 1.4 per cent in the last three months of 2002.