Vivendi Universal and financial stocks underpinned European share index gains yesterday afternoon, with Wall Street's slightly higher opening also helping markets rebound from one-month lows.
But weakness in Germany's Siemens, after it launched a €2.5 billion convertible bond, and cautious market sentiment as US weekly jobless data gave a reminder of the fragile economic environment, capped the market's rise.
By 1350 GMT, the FTSE Eurotop 300 index of pan-European blue chips and the euro zone DJ Euro Stoxx 50 index had risen 0.6 and 0.4 per cent respectively.
The Eurotop has now retraced about a quarter of its 22 per cent bounce from mid-March's six-year lows due to scant evidence of a pick-up in the European economy and concerns that a strong euro will wipe out companies' foreign currency earnings.
"Investors are unwilling to anticipate an economic recovery. They need to see at least advanced indicators showing that this recovery is going to happen and until these come, the markets are likely to continue to fluctuate in the same trading range," said Florent Brones, Global Strategist at BNP Paribas in Paris.
"For the moment we have no reasons to break below or above this trading range. First-quarter results were not that catastrophic and we don't believe in a scenario of deflation."
"But we don't see a recovery happening before 2004 and we think the strength of the euro will force many analysts to lower their corporate profits' expectations for the next quarters."
Among national benchmarks, France's CAC-40 tacked on 0.1 per cent and Britain's FTSE 100 jumped 0.7 per cent, the Swiss Market Index rose 1.8 per cent, and Germany's DAX index underperformed, nudging 0.1 per cent lower as Siemens weighed.
Signs that Vivendi Universal is making progress in selling its US entertainment business drove the media titan's shares some 4.5 per cent higher as investors perused a growing line-up of potential bidders.
Other media standouts included Granada, up eight per cent as traders reported switching to the British broadcaster after it posted a leap in first-half profits earlier this week, and domestic peer Carlton, buoyed by a Deutsche Bank rating upgrade after Wednesday's pleasing half-year earnings.
Shares in Reuters, supplier of news and data to financial markets, climbed 4.7 per cent after Morgan Stanley upgraded its stance on the stock to "overweight" from "underweight".
Sentiment in the financial sector was lifted by Zurich Financial after Europe's third-largest insurer reported a recovery in net profit for the first quarter and reiterated it was on track to restore profitability in 2003 after plunging to a large loss in 2002.
Benelux financial company Fortis also climbed four per cent after investment bank Goldman Sachs said it had upgraded its rating on the Dutch-Belgian firm's stock to "outperform" from "in-line".