European blue-chips were flat yesterday afternoon as techs firmed after pleasing results from US bellwethers Intel and Microsoft but Lloyds TSB tumbled on dividend worries.
A firmer open on Wall Street underpinned European equities. By 1347 GMT, the FTSE Eurotop 300 index was down 0.29 per cent at 819 points. The benchmark is up about 20 per cent from its March 12 six-year closing low, though stagnant global economic growth and sluggish earnings momentum in Europe remains a worry for many.
"While the corporate sector in the US may be bumping along the bottom, the same cannot be said for the sector in Europe, which is continuing to undergo painful restructuring," said Clive McDonnell, a European strategist at Standard & Poor's Equity Research.
European technology stocks were broadly higher as investors chose to focus on the good tidings in a mixed bag of results and outlooks from leading US and European companies.
In the US chip and software sectors, heavyweights Intel, Microsoft, Texas Instruments and Motorola all published earnings after Tuesday's market close. In Europe Thomson and ASML reported.
"Of key importance for European investors was the report from Texas Instruments, which announced a solid increase in sales of communications chips, which is a positive leading indicator for Nokia's report tomorrow," said Mr McDonnell.
The world's largest handset maker Nokia was flat ahead of its first-quarter earnings report on Thursday.
Lloyds TSB dropped four per cent after the chairman of Britain's fourth largest bank warned that he could not guarantee future dividend payments.
"No board of directors could guarantee future dividend payments in the current stock market," Chairman Maarten van den Bergh told investors at the bank's annual general meeting.
But analysts said that while this spooked investors and drove shares down it was exactly what the firm had said in its 2002 results statement and no surprise.
A sharp rise in energy costs pushed US consumer prices up in March but there was little sign of inflation pressure elsewhere in the economy.
"Investors have largely ignored this data as it is not forward looking and cannot provide clues as to the likely strength of consumer and business demand in the wake of the Iraq war," said Steve Barrow, a strategist at Bear Stearns.
"There is some concern however that companies will not be able to command higher prices in a low-inflation environment."