European share indexes closed near break-even yesterday as investors digested a hefty serving of corporate results and buyers paused after pushing stocks steadily higher over the past few weeks.
French bank Societe Generale was among the top blue-chip gainers, climbing 3.7 per cent after posting a forecast-beating 30 per cent rise in fourth-quarter profits.
But telecoms equipment maker Ericsson tumbled 8.2 per cent, more than erasing this week's rally, as disappointment over margins overshadowed a strong final quarter.
The FTSEurofirst 300 index of pan-European blue chips closed 0.1 per cent lower at 1,087.4 points, having failed to hit a fresh 31-month intra-day high for the first time in 11 sessions.
"We've had a very solid run in the past two weeks or so, partly due to a softening of (US) interest rate expectations and partly because results have been reasonable, on the whole," said a dealer at a London-based fund manager.
"That said, we can't go up in a straight line, so it's no surprise to see a bit of a pause."
The narrower DJ Euro Stoxx 50 index ended unchanged at 3,044 points.
Sector performance was mixed, with economically sensitive technology stocks down sharply but heavyweight banks and oil stocks higher.
Credit Suisse First Boston favours higher-growth stocks, which show increasing earnings, over more stable value stocks in the current environment.
"We think that growth looks very cheap," said Robert Jukes, a strategist at CSFB, highlighting near-historic price-to-book ratios and cyclical factors.
"If nothing else, growth has underperformed value for the last five years or so."
CSFB identified companies including BSkyB, Vodafone, Puma and Bulgari which have delivered among the strongest growth in revenues and profit over the past five years and were expected to do so for the next couple of years.
Around Europe, London's FTSE 100 and Zurich's SMI Index closed 0.2 per cent and 0.1 per cent firmer, respectively, while Paris's CAC-40 ended flat and Frankfurt's DAX closed 0.3 per cent weaker.
Among the host of heavyweight companies reporting results, DaimlerChrysler fell 1.2 per cent after its fourth-quarter earnings fell well short of expectations, hit by a slump in profits at its luxury Mercedes car division.
Drugmaker GlaxoSmithKline ended 0.3 per cent firmer after reporting a dip in 2004 earnings but predicting a recovery this year, but smaller rival Shire Pharmaceuticals dived 10 per cent after Canadian regulators suspended its top-selling hyperactivity drug, citing the sudden death of some patients. Volume in Shire was more than 12 times the average over the past 30 days.
France Telecom reported a 7.4 per cent rise in full-year core profit but its dividend disappointed some investors and its shares closed 2.3 per cent lower.