Positive debt news at French chemical maker Rhodia and unsurprising US data on economic growth and consumer confidence helped European stock markets hang onto gains yesterday afternoon.
French reinsurer Scor was a bright spot, up seven per cent amid relief after the close of its €750 million rights issues and renewed interest in a stock that has sharply underperformed its sector in 2003. Things were less rosy for Italy's Capitalia, San Paolo, Monte Paschi and Intesa - all creditor banks to troubled food giant Parmalat.
Corporate news was paper-thin on the last full session before Christmas as investors who had not already left for the year-end holidays were reluctant to open new positions before trading resumes as normal in January.
By 1515 GMT, the FTSE Eurotop 300 index of pan-European blue chips was 0.4 per cent higher at 948 points, while the narrower DJ Euro Stoxx 50 index rose 0.4 per cent to 2,725 points.
Fresh US data added to evidence of a recovery in the world's largest economy, but economists said this was still not strong enough to shake off worries about the sustainability of the recovery.
Third-quarter gross domestic product growth came in at 8.2 per cent - the same as the Commerce Department estimated a month ago - and the final reading of the University of Michigan survey showed consumer confidence fell in December from November. But confidence improved in the second half of the month after the capture of former Iraqi leader Saddam Hussein.
A separate report showed that consumer spending grew 0.4 per cent in November, while incomes rose a solid 0.5 per cent that month.
"The continuously low savings components of personal income is not reassuring for the prospects looking forward. Such a low savings level even after tax cuts and low interest rates raises fears over what will happen when all of this will stop," said Olivier Gasnier, economist at SG Securities in Paris.
"We still think that 2004 could see another few sets of strong growth but there is a time when the machine will stop of its own. The job situation along with the limited spending power for consumers and pricing power for companies make this recovery dangerously fragile."
Improving economic conditions and rising corporate earnings around the world have helped European equity markets rally nearly 40 per cent since mid-March's multi-year lows, and are set to offer their first annual returns in four years.
Around Europe, London, Paris, Frankfurt and Zurich all headed between 0.2 and 0.7 per cent higher, while in New York, the Dow Jones industrial average and the tech-laced Nasdaq Composite gained 0.3 and 0.6 per cent respectively.