European blue chips crested 2003 highs then trimmed gains yesterday as hopes for higher corporate profits in 2004 were curbed when US economic data fell short of high expectations.

Monthly US home sales, US consumer confidence and manufacturing in the Chicago region were all slightly below consensus forecasts, but the broader picture remained one of solid growth.

"The headline data were not great but the reaction has been muted because many investors are away on holiday and there are positive elements within the reports," said James Knightley, a global economist at ING Financial Markets.

"Within the consumer confidence data, the expectations component improved and this correlates well with future consumer spending. The Chicago PMI remained above the watershed 50 mark, which means there is further growth ahead. This set of data does not change the positive growth outlook."

Gains in chip-related shares helped keep markets above par after IDC, the information technology research company, raised its 2004 forecast for global semiconductor sales growth to 18 percent from 16 per cent, driven by China.

Auto stocks braked as the dollar plumbed new troughs against the euro following the US data. Investors fear a strong euro will make exporters less competitive in the United States.

French carmakers Renault and Peugeot both dropped 0.37 per cent. Europe's biggest chipmaker STMicroelectronics added 0.7 per cent and German peer Infineon climbed 0.36 per cent.

The FTSE Eurotop 300 index closed up 0.26 per cent at 955.59 points according to the latest available prices, its sixth straight day of gains fuelled by final changes to investors' stock holdings. Earlier it hit an intraday high for the year of 959.08.

The DJ Stoxx 50 index gained 0.27 per cent to 2,751.48 points. It also recorded an intraday high for 2003.