Investors are braced for a rush of European earnings this week with heavily weighted oil majors BP and Royal Dutch/Shell and drug makers GlaxoSmithKline and AstraZeneca centrestage.
Results from carmakers such as DaimlerChrysler and banking stocks, including Deutsche Bank and ABN Amro, will also grab attention.
But fears that US interest rates will rise soon and dampen economic growth will keep the FTSE Eurotop benchmark in paralysis, and a whisker away from March's 20-month high, economists and strategists said.
Investors will focus on firms' profit growth though rather than a turn in the interest rate cycle, they said.
"We are right at a cusp with markets in transition towards stocks away from government bonds," said David Brown, Chief European Economist at Bear Stearns.
"The US economy is strong and as long as the current earnings season is good and the outlook for corporate profits remains strong, equity markets should start to gird themselves forward," Brown said.
Investors will look to first-quarter 2004 figures from BP on Tuesday and Royal Dutch/Shell on Thursday, in the shadow of a crisis of confidence at Anglo-Dutch firm Shell after it revealed over-optimistic reserves bookings earlier this year.
Analysts expect profits to be bigger than the fourth quarter's thanks to stronger oil prices and downstream margins, but weaker than a year ago when natural gas prices and fuel retail margins were higher.
Schering will be first of several drug makers to post first-quarter numbers next week. Its results are due on Monday and will be followed by GlaxoSmithKline, AstraZeneca and Germany's Altana, all due on Thursday.
Aventis will also remain in the spotlight ahead of its earnings on Thursday, after Novartis said it will start merger talks with the Franco-German group to help it fight off a hostile bid from Sanofi-Synthelabo.
In the banking sector, BBVA reports on Monday, ABN Amro and Bank Nordea on Wednesday, Santander and HVB Group on Thursday and Deutsche Bank on Friday.
Investors will be hoping for solid results from automakers.
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