European stocks tread water, Nokia shares drag

European blue chips remained up but off session highs after a flat open on Wall Street today, with a mixed take on Nokia's second…

European blue chips remained up but off session highs after a flat open on Wall Street today, with a mixed take on Nokia's second quarter report and further falls for selected pharmaceuticals stocks keeping the market from pushing ahead.

"In the US, where we've had a mass of companies reporting, about 80 per cent have come in at, or above, forecasts and you have to expect that to start rebuilding confidence going forward," said Mr Mark Tinker, European strategist at Commerzbank in London.

By 2.45 p.m., the FTSE Eurotop 300 index of pan-European blue chips was 0.2 per cent higher while the narrower DJ Euro Stoxx 50 index was up about 0.3 per cent.

The Dow Jones Industrial Average was up 0.34 per cent and the tech-focused Nasdaq Composite Index was off 0.56 per cent.

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Deutsche Telekom led the advancers, up about seven per cent, on hopes new chief executive Mr Helmut Sihler will take bold steps to reduce the telecom flagship's huge debt pile.

Nokia posted higher second quarter profits, as expected, but shares in the world's largest mobile phone maker fell back after analysts said its forecasts left room for disappointment. The shares were down about six per cent.

Shares in Sweden's Ericsson were down 0.3 per cent ahead of its second quarter earnings tomorrow. They will be watched for pointers on the state of telecoms equipment demand.