European shares were mixed yesterday as technology stocks such as Nokia lent support but car makers were hit again by fears over the strength of the economy and unfavourable exchange rates.
Germany's DaimlerChrysler topped the blue-chip losers boards with a 3.7 per cent fall after data showed its sales in the key US market slumped nearly 15 per cent in September.
Dutch retailer Ahold was the top blue-chip gainer, climbing seven per cent after finally issuing long-awaited results for 2002, and restated accounts for 2001 and 2000. Despite the 2002 loss of €1.2 billion, investors were relieved the business was progressing according to plan.
By 1600 GMT, with only Frankfurt still officially trading, the FTSE Eurotop 300 was up 0.4 per cent at 878 points, while the narrower DJ Euro Stoxx 50 index was down 0.2 per cent at 2,435 points.
An uninspiring performance by US stocks capped sentiment this side of the Atlantic after US weekly jobless claims rose 13,000 in the past week, although economists said the statistics were skewed because many processing offices were closed by a hurricane the previous week.
European investors were now turning their eyes to tomorrow, when the crucial September US unemployment report is due for release, hoping for signs that the economic recovery is able yet to create jobs.
The past two weeks' patchy set of data have fuelled doubts over the sustainability of an economic rebound and fears that corporate profits may not live up to lofty recovery expectations.
But strategists said doubts, although understandable after a market rally of around 35 per cent in the past two quarters, may soon be soothed when stronger economic fundamentals start translating into higher corporate revenues and profits.
"We've had an initial cyclical rally as the economy was getting out of recession, followed now by a period of profit-taking and uncertainty," said Deutsche Bank European equity strategist Charles de Boissezon.
"What we are now waiting for is the second leg of the rally, which is when people realise that better economic fundamentals are translating into profits," he said, adding he expected this new rally to start before the end of the year.
But in the meantime, markets looked set for more pain. The benchmark Eurotop 300 index has slipped more than five per cent since mid-September's eight-month highs.
Around Europe, London closed one per cent higher and Zurich gained 0.3 per cent, but Paris ended up just 0.06 per cent and Frankfurt was down 1.4 per cent by 1624 GMT, weighed by Wall Street, where the Dow Jones industrial average and the tech-laced Nasdaq Composite inched 0.16 and 0.37 per cent lower respectively.
Tech bellwether Nokia gained 3.1 per cent, closing at its best level in two weeks, as investors cheered news it planned to hire 150 more staff at a mobile phone plant in Finland to meet strong demand. WestLB's upgrade to "underperform" from "sell" also helped underpin sentiment on the stock.
Meanwhile, a double helping of positive news lifted French peer Alcatel 3.6 per cent higher.
The company won a €450 million contract to renew the signals on the London subway's Jubilee and Northern Lines, and was chosen by Telecom Italia as its principle supplier as part of the Italian operator's plans to invest 300-400 million euros in France between now and 2005.
News that Marconi, the British telecoms equipment maker that is rebuilding its business after a near collapse, would list on the Nasdaq stock market sent its shares 8.5 per cent higher, amid hopes the move would help attract more US interest and boost liquidity.