European shares ended mixed yesterday after a topsy-turvy session as investors stood back to digest new explosions on London's transport network, China's revaluation of the yuan and a disparate set of earnings.
Nokia led European blue-chip decliners after shocking investors with a weak third-quarter profit forecast, pounding shares of the world's top mobile phone maker and technology bellwether 10 per cent lower.
But the construction sector rallied after French glass and building materials maker Saint-Gobain confirmed it might make a cash offer for British plasterboard maker BPB. BPB shares soared 26.5 per cent.
The FTSEurofirst 300 index closed 0.15 per cent up at 1,164.8, off a fresh three-year peak of 1,172.34 set earlier in the session - with London's FTSE 100 adding 0.12 per cent and Paris's CAC ending 0.16 per cent higher.
The narrower DJ Euro STOXX 50 shed 0.12 per cent.
The focus was on London, where four small explosions hit the transport network exactly two weeks after bombers killed more than 50 people in the British capital.
British Airways stock fell immediately amid fears people might be dissuaded from travelling, but the rest of the market gradually recovered as the blasts appeared to have caused no major casualties. British Airways shares also trimmed losses of 2.5 per cent to end 0.4 per cent weaker.
Currency markets also took the spotlight after China bowed to two years of political and market pressure by revaluing the yuan by 2.1 per cent, and left the door open to further rises by abandoning the currency's peg to the dollar.
Analysts deemed the move modest and said it would have a limited economic impact, but investors awaited to assess its full impact on the US economy.
The yuan's devaluation could raise the cost of goods for many major US importers, such as Wal-Mart, but it should also encourage US exports of heavy equipment to China.
"Overall impact on equity markets is likely a mild positive, as the move toward Asian rebalancing can be viewed as a positive step toward curing global imbalances," said Paul Niven, Head of Strategy at F&C Asset Management.
The revaluation helped Frankfurt's exporters-heavy DAX index outperform European peers, as did Siemens after the industrial conglomerate won a trio of deals worth around €600 million and E.ON on news its British unit Powergen would raise its energy prices.
The two stocks accounted for nearly half of the DAX gains.
Nokia's update pounded the technology sector, but Ericsson stood out with upbeat second-quarter earnings and sales growth, and raised forecasts for the mobile phone networks sector. The stock closed 2.7 per cent higher.
Elsewhere, the world's largest optical lens maker Essilor posted a near eight per cent rise in underlying first-half sales, putting it back on track to raise the figure as much as six per cent this year and lifting its shares by 4.7 per cent .
On the downside, Danone shares shed 5.2 per cent, handing part of the 23 per cent gains of the past two weeks, as French President Jacques Chirac pledged to defend the food group, joining a chorus of warnings from France's political elite at warding off a potential bid by US drinks giant PepsiCo for the "flagship of French industry."
In New York, the Dow Jones Industrial average was 0.5 per cent down.