London: European shares were flat on Friday morning, with technology shares boosted by upbeat results from US peer Google, offsetting falls in heavyweight miners as metals prices eased from earlier highs.
By 2:00pm, the pan-European FTSEurofirst 300 index was flat at 1,085.04 points, after closing 0.2% lower on Thursday.
Strong quarterly results from Google and US chipmaker Advanced Micro Devices helped European technology stocks rise, with ASML Holding, Infineon and STMicroelectronics up 1% to 1.5%.
Some caution, however, was expected ahead of a speech by the US Federal Reserve chairman Ben Bernanke, which could provide clues on what officials are planning to do to support the economy.
“Sentiment after hours is pretty good after those numbers (from Google). Investors will take the Google numbers well but with some caution and look ahead to Bernanke and U.S. data due later this afternoon,” said Giles Watts, head of equities at City Index.
Speculation in recent weeks the Fed will embark on further quantitative easing measures to spur the recovery has helped boost sentiment in the equity market while keeping the dollar under pressure across the board.
“What Bernanke might do is he could confirm this idea that the economy has lost momentum ... and he might just go a stage further by trying to identify the mechanics of what they (the Fed) might do, ” said Mike Lenhoff, chief strategist at Brewin Dolphin, chief strategist at Brewin Dolphin.
A fall in heavyweight mining shares, however, put some pressure on equity indexes, as metals prices retreated from earlier highs as investors unwound some dollar-long commodity positions.
Kazakhmys, Xstrata and Vedanta Resources shed 0.3 to 0.8%.
China’s Sinochem Corp will not launch a counterbid for Potash Corp, sources told Reuters, abandoning efforts to spoil BHP Billiton’s $39 billion bid for the Canadian fertilizer maker. BHP Billiton was 0.8% lower.
Still, technical charts indicated a bullish trend for equities, with the Euro STOXX 50 staying above a key resistance of 2,740.32, its 61.8% retracement of an April high to a May low for the third day in a row.
The index’s 50-day moving average, now at 2,741.69, moved closer to the 200-day moving average at 2,763.35, raising prospects that the 50-day average might cross the 200-day average --- signaling an uptrend for equities.
Investors are likely to focus on key economic data due from across the Atlantic later in the session, including US CPI and retail sales figures for September at 6:00pm, and the Reuters/University of Michigan consumer confidence numbers at 7:15pm.
Among individual movers, Old Mutual lost 3.9% after the Financial Times reported HSBC could drop out from an $8 billion bid for South Africa’s Nedbank, in which Old Mutual holds a 52% stake.
Carrefour fell 3.7% after Europe’s biggest retailer trimmed its 2010 profit forecast because of higher charges at its Brazilian business, offsetting a stronger than expected rise in third-quarter sales.