Eurostoxx 50: 2,939.09 (–11.75) Paris CAC: 3,883.83 (+1.16) Frankfurt DAX: 5,830.77 (–23.37)

EUROPEAN STOCKS ended slightly higher yesterday, helped by takeover fever in the retail sector, but gains were limited by Nokia’s surprise loss and big writedown, which knocked tech shares.

The FTSEurofirst 300 index of top European shares closed the roller-coaster session 0.1 per cent higher at 1,017.26 points, after rising to as high as 1,024.34, a level not seen since October 7th, 2008.

Retail stocks rose, with J Sainsbury jumping 10 per cent on market talk that Qatar’s sovereign wealth fund was planning a renewed offer for the British grocer, after a previous bid attempt failed in 2007.

The MA buzz propelled shares of UK retailers, with Tesco up 1.7 per cent, Wm Morrison up 1.8 per cent and Kingfisher up 2.1 per cent.

Banks ended the session mixed, with HSBC down 2.1 per cent and Deutsche Bank up 0.7 per cent, after results from Goldman Sachs and Citigroup failed to impress investors a day after JPMorgan posted forecast-beating profits that fuelled earnings hopes.

Citigroup posted a quarterly per-share loss as it suffered $8 billion of credit losses, while Goldman’s quarterly earnings rose, but its shares dropped on Wall Street on disappointment that so much of the profit came from trading gains that might not be sustainable.

The big credit losses at Citigroup revive concerns over the health of the US economy, said Victor Peiro Perez, head of strategy at Caja Madrid Bolsa.

“Negative earnings, especially if it’s coming from the banks, could prompt a sector rotation on the market,” he said.

“Financial stocks have already priced in an economic recovery and could reach a plateau, while other stocks, such as shares of software makers, still have room on the upside.”

Banking stocks, hammered in 2008, have surged 175 per cent since the stock market hit a floor in early March.

Nokia tumbled 11 per cent after the world’s top cellphone maker unveiled a big writedown at its struggling networks unit and posted a drop in its smartphone sales from the previous quarter.

“Profit margins are under pressure . . . Nokia needs to do some serious cost-cutting to adjust to weaker demand,” said Christian Blaabjerg, chief equity strategist at Saxo Bank. – (Reuters)