European blue chips ticked higher yesterday, supported by strong automobile stocks led by DaimlerChrysler and a firm Wall Street opening despite a surprise rise in US jobless claims.
By 1400 GMT, the FTSE Eurotop 300 index was 0.33 per cent higher at 907 points while the narrower DJ Euro Stoxx 50 index rose 0.32 per cent to 2,573 points.
European stock markets briefly blipped lower on news that jobless claims in the US in the latest week climbed to 422,000, when analysts had expected a dip to 400,000.
Unemployment is seen as the weak point of the economic recovery, triggering fears it may dent consumer spending which fuels two-thirds of the US economy.
But a positive start on Wall Street where the Dow Jones industrial average rose 0.28 per cent and the tech-rich Nasdaq Composite stood 0.54 per cent stronger, added some support to the European market.
Traders said volatility remained high. Market volatility as measured by Germany's so-called "fear barometer", the VDAX, hit its highest level in a month yesterday. Germany's Volatility DAX has jumped some 10 per cent so far this month to around 26.71 but remained well below the 59.39 all-time-high posted in October 2002.
Among gainers, Danish financial giant Danske rose 2.83 per cent on its share buyback plans and British insurer Legal & General gained 1.79 per cent after a broker upgrade.
French food group Danone rallied 3.9 per cent as media reports revived speculation the owner of some of Europe's best known water brands, biscuits and dairy products may be a takeover target.
France's La Tribune newspaper said Coca-Cola Co or arch rival PepsiCo could make a bid for the Paris-based company, which again played down the speculation.
Auto stocks rose, recovering part of this week's losses after a lack of positive news from the Frankfurt auto show spooked investors. DaimlerChrysler's 1.4 per cent gain and a 2.3 per cent stronger Volkswagen led the sector higher.
But controversy over a hefty pay package for the new chief executive of Dutch retailer Ahold swelled, threatening to force the supervisory board of the troubled group to resign and pushing the shares down two per cent.