European shares were mixed late yesterday as gains in heavily-weighted oil stocks such as Shell helped offset a results-driven slump in consumer goods giant Unilever and a slide in Swiss Re.
London outperformed and reversed its losses from Thursday when other major markets were closed for a holiday and Wall Street shrugged off a weak US jobs report and pushed higher.
Some strategists suggested a "buy the dip" mentality was beginning to creep into the market. Investors put the war in Iraq behind them and dared assume the region's three-year bear market was finally over as shares recovered by around a fifth from March's six-year lows.
"The rally we have seen recently is broader and more sustainable than the previous four bear market rallies," said Bernd Meyer, European equity strategist at Deutsche Bank in Frankfurt.
For markets to push higher, though, investors needed to see improved economic data and a pickup in company profits - not just as a result of cost-cutting but as a result of higher sales, Meyer said.
By 1555 GMT, with only Frankfurt still open officially, the FTSE Eurotop 300 index of pan-European blue chips was up 0.4 per cent at 821 points after surging 10.4 per cent in April - its biggest monthly gain in almost six years.
The euro zone Euro Stoxx 50 index eased 0.3 per cent. London's FTSE 100 surged 1.9 per cent, Frankfurt's DAX rose 0.6 per cent, and the CAC-40 added 0.3 per cent in Paris.
Shares fell in Zurich, Madrid, Amsterdam, and the Nordic region.
The market eased back from three-month highs this week as the post-Iraq war rally sustained by encouraging US earnings data ran out of steam.
Next week could see markets consolidating further as investors negotiate yet more European company results and await clear evidence of a pickup in economic activity. However, potential interest rate cuts on both side of the Atlantic could generate some buying interest.
Shares in Anglo-Dutch Unilever dived 9.0 per cent after the world's third-largest food group reported a slim two per cent rise in first-quarter profits and said earnings and sales of its top brands fell short of its forecasts.
Bigger rival Nestle fell 2.2 per cent as investors worried over whether Unilever's experience was being replicated elsewhere in the food and beverage sector.
Shares in Swiss Re slipped 3.0 per cent after Merrill Lynch downgraded the stock to "neutral" from "buy" and following a newspaper report that it had held talks with General Electric about buying its life reinsurance operations.
Swiss Re declined to comment on the Wall Street Journal report.
Shares in Royal Dutch/Shell led the heavily-weighted oil sector higher with a 2.7 per cent gain in Amsterdam, after the Anglo-Dutch major reported record quarterly profit.
French rival TotalFinaElf jumped 3.4 per cent as investors looked for more of the same when it reports next week.
Meanwhile, drug stocks sealed a week of strong results with further gains across the sector, with GlaxoSmithKline up 4.5 per cent. The banking and telecom sectors also gained ground.
Shares in BBVA fell 1.3 per cent after investment bank JP Morgan downgraded its rating of the Spanish blue-chip bank to "underweight" from "neutral" after what it called weak first-quarter results.
Shares in Austrian beverage maker BBAG and its beer subsidiary Brau Union leapt by 29 per cent and 39 per cent respectively after Dutch brewing giant Heineken made a takeover offer valuing BBAG at some 1.9 billion euros including debt.
Shares in cash-hungry French engineering firm Alstom leapt 24 per cent, spurred by talk it may clinch a major contract to rebuild faulty British trains and on hopes of speedy and lucrative asset sales.