European shares edged up after reassuring updates from drugmaker Sanofi and consumer goods group Unilever, although some traders said euro zone concerns would curb further gains. The FTSEurofirst 300 index closed up 0.2 percent at 1,095.90 points. However, the euro zone's blue-chip Euro STOXX 50 index fell 0.3 percent to 2,483.43 points as financial stocks declined.
Sanofi rose 1.4 percent, adding the most points to the FTSEurofirst 300 index, after the French company forecast that 2012 earnings would fall less than expected. KBL Switzerland chief investment officer Philippe Carette backed "defensive" equity sectors such as healthcare, seen as resilient in an economic downturn, due to underlying worries over the euro zone and Spain's debt crisis.
"I suspect we may be due for some correction. I don't see a clear picture on how to address the Spanish problem. The amount of bad loans in the Spanish banking system is huge," he said. Spain is under pressure to seek a sovereign bailout, and the country's IBEX equity index fell 0.2 percent, with Spanish bank Santander slipping by 0.6 percent after posting a drop in profits.
Europe's leading companies have so far reported mixed third-quarter business updates. Unilever joined Sanofi with encouraging results on Thursday, reporting higher sales that caused Unilever's Amsterdam-listed shares to rise 2.6 percent and contribute one of the biggest points gains to the FTSEurofirst 300.
However, France Telecom slumped by 5.2 percent after it cut its dividend and warned of tough times in 2013. According to Thomson Reuters Starmine data, 47 percent of European companies have so far missed their earnings forecasts. Although the FTSEurofirst 300 has risen 8 percent since July, when world central banks pledged new measures to fight off the economic slowdown, it has fallen 2.4 percent from a peak of 1,122.76 points in mid-September.
Rafael Molinero, who runs London quantitative hedge fund Molinero Capital Management, said he was sticking with a "long" position on betting on further gains for European equities. Other traders said that while they would not wager big bets on European stock markets advancing much further in the near term, some key European equity indices appeared well-supported at current levels according to technical analysis. Mike Turner, European equity options broker at XBZ Ltd, said an inverse "head-and-shoulders" pattern was forming on the Euro STOXX 50 and Germany's DAX indexes.
This is often seen by traders who use technical analysis as a sign that markets might edge higher, and Turner said most investors were not taking out big "short" bets on major falls on European stock markets for now. "In the short-term, people are less inclined to 'short' it," he said.
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