Oil majors help European stocks end up

European shares closed higher yesterday, boosted by a firmer dollar and gains in heavyweight oil companies, but a rise in crude prices kept a lid on gains elsewhere in the market after OPEC vowed to curb excess supply.

British utility group Centrica also weighed, tumbling 8.3 per cent after warning that soaring energy prices would hit margins in some of its key businesses.

The FTSEurofirst 300 index of pan-European blue chips closed 0.4 per cent higher at 1,029.5 points but down around 0.6 per cent for the week.

The narrower DJ Euro Stoxx 50 index rose 0.6 per cent to 2,904 points.

"We think the market valuation is very supportive and as far as profitability growth for next year is concerned, yes it will be slower growth than 2004 but still pretty reasonable," said Kevin Lilley, a fund manager at Royal London Asset Management.

"We don't see any major hiccups around the corner but obviously we'll be keeping an eye on what's going on with the currencies and with commodities."

The dollar rose strongly, moving off its recent lows as economic data pointed to the prospect of higher interest rates.

The University of Michigan's December consumer sentiment index climbed to 95.7 from 92.8 in November, topping expectations of a rise to 93.5.

In addition, US producer price inflation rose by a larger than expected 0.5 per cent in November.

With a host of data next week including November retail sales and CPI inflation, as well as a Federal Reserve meeting, economists were cautious on reading too much into the figures.

"There's still some evidence of prices rising, albeit modestly but how much is coming through at the consumer level?," said Richard Reid, an economist at Citigroup.

"To the extent that the consumer confidence was better and the PPI wasn't much worse (than expectations), by-and-large those numbers will do." In New York, the blue-chip Dow Jones industrial average was 0.1 per cent weaker at 10,538.4 points, while the Nasdaq Composite Index fell 0.2 per cent to 2,124.9 points by 1715 GMT.