European blue chips were set for a mixed finish in painfully thin volumes late on Monday, with BNP Paribas and auto stocks among the top fallers, as trading wound down for the Christmas holiday season.
Sentiment generally was subdued due to fears about a looming war in Iraq, but oil stocks like BP and Shell were buoyant as crude prices rose towards one-year highs and helped keep the region's biggest market - London - firmly above breakeven.
"It seems increasingly likely that we'll have conflict in Iraq, and that will mean more volatility and higher oil prices, which is never good for equity markets," said Cesar Martinez, director of international equities at GesMadrid, the fund management arm of Caja Madrid in Madrid.
By 1641 GMT, with only Frankfurt still trading, the FTSE Eurotop 300 index of European blue chips was up 0.3 per cent at 870 points, while the narrower DJ Euro Stoxx 50 was up 0.6 per cent at 2,454.
Losses in German chemicals firm Bayer and Swiss bank UBS dragged on Frankfurt's DAX and Zurich's Swiss Market indices, which fell by some one per cent each.
The benchmark Eurotop 300 has retraced about half of its 20 per cent gains, since plumbing five and a half year lows in early October, as economic and geopolitical concerns have resurfaced.
The Eurotop is down 31 per cent so far this year, having slipped 18 per cent in 2001 and three per cent in 2000.
In New York, the Dow Jones industrial average pushed 0.3 per cent higher after encouraging economic data, while the tech-laden Nasdaq Composite jumped 1.2 per cent.
In Washington, a US official said on Sunday the campaign to rid Iraq of any weapons of mass destruction was entering its final phase. Prime Minister Tony Blair on Friday told British troops to prepare for a possible war.
Rolf Elgeti, European equity strategy chief at Commerzbank, said seasonally-weak trading volumes and the potential for fund managers to fine tune their books by trading derivatives could magnify any war-related volatility over the year-end period.
BNP Paribas fell heavily as investors were reminded that the French banking giant could still engage in a costly bidding war for smaller bank Credit Lyonnais, despite an agreed bid from rival Credit Agricole.
Carmakers were under pressure. Traders said news out of Detroit on Friday that US auto dealers were cutting their earnings estimates was partly to blame.
DaimlerChrysler shed 1.1 per cent, BMW lost 2.4 per cent and France's Renault fell 1.8 per cent.
Spain's top bank Santander Central Hispano rose 2.45 per cent, boosted by data showing Brazil was now almost certain to fulfil its IMF-agreed goals after a tumultuous year in which the country had been threatening with a debt crisis.