European shares ended mixed in subdued pre-Christmas trading yesterday as gains in luxury goods makers like LVMH were offset by concern over legal action against UBS.

Shares in the Swiss banking giant fell 1.1 per cent after the company said it faced legal action for possible breaches of securities laws due its relationship with scandal-plagued US healthcare company HealthSouth.

Alma Media was among the region's biggest gainers, up 24 per cent after Norway's top media group Schibsted ASA made a surprise €705 million ($944 million) bid for the Finnish group. Schibsted shares shed 2.3 per cent.

Electrolux shares also jumped 4.5 per cent as dealers cited renewed talk that the world's biggest maker of household appliances could be a takeover target for private equity firms.

By 1645 GMT, the FTSEurofirst 300 index of pan-European blue chips was 0.2 per cent weaker at 1,035.5 points while the narrower DJ Euro Stoxx 50 index rose 0.2 per cent to 2,911.9 points.

Other gainers included Swatch and LVMH after Goldman Sachs said the groups were best placed to exploit a likely jump in Chinese demand and foreign travel that could raise the average fair value of luxury goods shares by at least 15 per cent. The stocks added 3.3 per cent and 1.4 per cent, respectively.

Elsewhere, Nokia added 1.7 per cent, making it one of Europe's top blue-chip gainers, as investors continued to chase the stock after the group's chief executive stuck to forecasts for 10 per cent growth in the mobile phone market in 2005.

Shares in Fiat rose 1.7 per cent on market talk it was close to finalising a deal with General Motors to cancel a put option the Italian group holds to sell its auto unit to the US firm.

On Wall Street, the Dow Jones industrial average was 0.4 per cent at 10,706 points, helped by a rebound of drugs giant Pfizer after fears subsided about of the possible withdrawal of its arthritis drug Celebrex.