London: European shares pared early losses and turned flat yesterday afternoon, as strong sales from LVMH lifted the luxury goods sector, offsetting a dip in banking stocks.
At midday yesterday, the pan-European FTSEurofirst 300 index of top shares was flat at 1,101.23 points, having moved in a range of 5.41 points between a high of 1,102.76 and a low of 1,097.35.
The index is up more than 70 per cent since reaching a lifetime low in early March 2009.
Analysts said investors were wary ahead of key first-quarter earnings statements from the likes of Intel and JP Morgan due this week.
"We're just starting the US earnings season, and it may be that the market wants to see the lie of the land," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities, in London.
He added: "It looks as if the momentum that had been carrying the markets forward has been drained a little. The markets have performed astonishingly well."
Luxury goods retailers were boosted by LVMH, the world's biggest luxury goods group, which rose 3 per cent after it reported forecast-beating comparable sales growth for the first quarter.
Within the sector, Christian Dior and Luxottica rose 2.6 and 1 per cent respectively.
Banks were lower, reversing gains from the previous session, with investors awaiting results from key US firms this week, including JPMorgan, Bank of America and General Electric, to gauge the pace of economic recovery in the world's largest economy.
Barclays, HSBC and Lloyds fell between 0.6 and 1.3 per cent.
