European shares end weaker on mixed results, data

European share indexes closed weaker yesterday as mixed company results and uncertainty on the economic outlook kept investors nervous, despite forecast-beating profits from oil major BP.

Helping keep European losses in check, Wall Street was treading water after surprisingly strong housing market data and a further fall in oil prices.

The FTSEurofirst 300 index of pan-European blue chips closed 0.3 per cent lower at 1,073.5 points, erasing Monday's gains. The narrower DJ Euro Stoxx 50 index fell 0.1 per cent to 2,983.2 points.

Debate about the health of the global economy, and in particular the US economy, has divided opinion among investors and strategists in recent weeks, leading to volatile trading.

Some investors are shifting their portfolios in favour of more defensive, value sectors such as utilities and consumer staples and away from more cyclical, growth sectors such as technology and materials.

However, JP Morgan said it was sticking to growth over value.

"The persistent doubts regarding the durability of US growth should dissipate in acknowledgement that corporate health, as evidenced by the continued strength in earnings, has laid the foundations for sustainable growth," global strategist Abhijit Chakrabortti wrote in a note to investors.

Oil prices eased for a second day and lifted hopes for less damage to corporate profits and for increased consumer spending. US oil prices slipped below $54 a barrel after Saudi Arabia said it could quickly tap spare oil production capacity if necessary.

Stocks tested session lows after data showed a fall in US consumer confidence, while bond markets were transfixed by a surge in sales of new US homes, which sent yields soaring.

In New York, the blue-chip Dow Jones industrial average was down 0.1 per cent at 10,232.4 points, while the Nasdaq Composite Index also fell 0.1 per cent to 1,949.3 points. by 1616 GMT.

The fact that US stocks ended the first quarter down is a bad sign for the remainder of the year, especially when interest rates are rising, according to research firm FactSet JCF.

The Dow ends the year in negative territory more than 85 per cent of the time in such cases, FactSet said.

"We continue to recommend taking up a long position in European equities at the expense of US equities," FactSet said in a note.

Around Europe, London's FTSE 100 closed 0.4 per cent lower, while Frankfurt's DAX shed 0.3 per cent. Paris's CAC-40 ended flat and Zurich's SMI rose 0.2 per cent.

Swiss drugmaker Roche was the biggest positive influence on European markets, gaining 3.5 per cent after its majority-owned Genentech unit said its cancer drug Herceptin improved survival of certain breast cancer patients.