European shares closed higher for the first time in four sessions yesterday, despite a mixed bag of US economic data, as higher oil prices fuelled gains in heavily-weighted oil stocks like BP and Shell.

Other climbers included Schneider, up 4.7 per cent after the French electrical equipment maker unveiled ambitious financial targets for the period to 2008, while Reuters shares added 2.5 per cent after the news and information provider said it expected a three-year slide in revenue to ease.

Italian toll road operator Autostrade also rallied after Credit Suisse First Boston upgraded the stock to "outperform", and the British government short-listed it among potential bidders to develop a nationwide lorry highway toll. The FTSEurofirst index was 0.4 per cent stronger at 1,042.5 points, with investors having largely shrugged off policy statements from the European Central Bank and the Bank of England, which both left interest rates unchanged.

But sentiment was uncertain after two US economic reports painted a mixed picture of the world's largest economy - with retail sales jumping more than expected in December, but the latest first-time jobless claims recording a surprise climb.

"Today's economic data failed to inspire traders," said Geoff Langham, head of trading at CMC Group. "Some equities may well now be seen as being undervalued, but as we approach the weekend, other than a degree of cherry-picking there seems to be little out there to drive prices any higher."