European shares held steady yesterday, taking their cues from a mixed showing on Wall Street and pausing for breath before what technical analysts say could be a push to new multi-year highs.

After hovering either side of the no-change mark, the pan-European FTSEurofirst 300 ended the day down less than a point at 1,194.02 points.

The pan-European index set a four-and-a-half-year high of 1,197.73 at the end of last week, bolstered by a series of record highs on the US Dow Jones Industrial Average, which was down 0.1 per cent at the European close yesterday.

“There is a clear improvement among the European indexes during the last months and that is still running,” said Achim Matzke, technical analyst at Commerzbank.

“We have seen several days with new all-time highs on Wall Street so it is not surprising to see it pause for a day. But I expect the bull market in US equities to continue, and that to also help European equities.”

Matzke forecast that the EuroSTOXX 50 index of eurozone blue chips, which closed 0.3 per cent lower at 2,711.85 points on Tuesday, could reach 2,900 points this year.

The macro news flow continued to underline ongoing risks, with Bundesbank chief Jens Weidmann saying that the eurozone crisis “is not over despite the recent calm on financial markets” and continued political wrangles over the US budget.

But investors kept snapping up European equities on any signs of weakness, as they have done recently, sending the FTSEurofirst 300 back into positive territory more than 10 times in the course of a jittery session yesterday.

“The positive momentum is definitely still there,” said Stephen Walker, head of equities research and market strategy at wealth management firm Ashcourt Rowan.

“There’s obviously quite a lot of people who have been caught out by this move... people who manage big pots of money are pretty tightly benchmarked so they get to a stage when they just get dragged into the market, regardless of what they think, and you just get that weight of money.”