Vivendi Universal's attempts to turn the corner towards profits will be in focus this week when its third-quarter results dominate a light corporate menu in a calendar otherwise dominated by US data.
Europe's largest drugmaker, GlaxoSmithKline, holds its keenly awaited research and development day on Wednesday, and the euro will be in focus after storming to a record high against the dollar last Friday.
Investors will also eye US employment data and surveys of the manufacturing and services sectors for hints that Europe will continue to be buoyed by strength over the pond.
Despite solid GDP data from both the US and eurozone economies, European shares have been held in a narrow trading range over the past six weeks, after rallying almost 40 per cent off six-year lows seen in March.
"So far as the big picture is concerned, the fundamentals all remain broadly supportive for good extensions in stocks going through to the end of the year," said David Brown, Chief European economist at Bear Stearns.
British companies will dominate a light corporate week. Britain's number-three ranked bank Barclays updates investors on its third-quarter performance tomorrow while software firm Sage will abe in focus as it reports its annual result also tomorrow.
Chocolate manufacturer Cadbury Schweppes is due to hold a trading update on Thursday.
Hotel and leisure stocks feature with annual results from hotel chains De Vere Group and Mitchells & Butlers on Wednesday and Thursday respectively.
And British brewer Scottish & Newcastle reports first-half earnings tomorrow while rival Wolverhampton & Dudley releases annual results on Wednesday. Annual results from German steelmaker ThyssenKrupp will also grab attention on Thursday.
Strategists said any further increases in European stock prices would need to be driven by evidence of improving fundamentals.
"There is a little bit more catch-up to come through... I think we're in a stage now where the European markets are orienting towards a better 2004 than they've been used to for some time," said Peter Dixon, an economist at Commerzbank.
Vivendi Universal reports third-quarter results tomorrow with investors watching for proof the company has turned the corner after calling in chief excecutive Jean-Rene Fourtou to put it on the road to profit.
The media and telecoms company said earlier in November its third-quarter sales fell by nearly two-thirds after it sold its water utility and as growth of its telecoms business failed to offset weakness in other units.
"It's too early to expect any signs of cost turnaround at the music division although we expect a sustained improvement at Canal+," said Deutsche Bank analyst Paul Reynolds.