European blue-chip indexes stayed around 19-month peaks today as positive tax news buoyed Dutch telecoms firm KPN and on relief profits at auto giant Volkswagen fell less than feared.
But Germany's Commerzbank was hit after it posted a surprising fourth-quarter loss due to a tax charge, missing analysts' forecasts of a profit, and confirmed it had ended 2003 with its worst-ever loss.
Swiss drugmaker Serono dropped 4.5 per cent after Irish rival Elan said it was filing for approval of its multiple sclerosis drug Antegren with the US Food and Drug Administration, a year ahead of schedule.
Shares in Elan, whose drug Antegren would compete with Serono's Rebif and Schering's Betaseron, rocketed 22 per cent on the announcement. Schering was down 2.5 per cent.
By 12:15 p.m., the FTSE Eurotop 300 index of pan-European blue chips was up 0.2 per cent at 1,006.8 points, the highest intra-day level since August 23, 2002.
The benchmark Eurotop 300 has gained five per cent since the start of the year, and 48 per cent since last March's six-year trough, as an economic upturn, accommodating monetary policy and corporate restructuring helped earnings recover.
"On the whole, things still look pretty positive and the market does want to go higher," said strategist Mr Rohini Rathour from Sarasin Investment Management in London.
"It's going to be a year of two halves, with a strong first half thanks to earnings, but the US election in November and risks of interest rate hikes could mean that we end the year roughly where we started it."
The euro featured highly again, surging to a fresh record high above $1.29.
But some strategists said the single currency, although hurting European exporters, was still some way from a level at which earnings growth in Europe would be prevented.
"The feel is that if the euro tries to go beyond $1.35, then it is really going to start to hurt earnings growth," said Sarasin's Mr Rohini. "But this level would also probably trigger some intervention, so on the whole people think 2004 will be the year when the pressure is coming off the euro."
Across Europe, Britain's FTSE was 0.1 per cent higher, France's CAC was up 0.3 per cent, Germany's DAX was up 0.2 per cent and the Swiss SMI ceded 0.3 per cent.