European Stocks Moving Sideways (Reuters) (02-01-2008)

PARIS, Jan 2 (Reuters) – After opening in negative territory, European shares were trading in narrow range either closely under or closely over the unchanged mark, as investors remained cautious ahead of Friday's U.S. monthly jobs data, which will shed light on the health of the world's largest economy.

By 0940 GMT, the FTSEurofirst 300 index of top European shares was barely changed at 1,506.4 points, after losing as much as 0.5 percent in the first few minutes of the session; it closed 2007 gaining a measly 1.6 percent compared to previous years, its worst performance since 2002 as a global credit squeeze hit financial stocks.

Investors will wait for the U.S. non-farm payrolls data for December before making any move, said Jean-Francois Virolle, chief strategist at Global Equities, in Paris.

Financials, buffeted since last summer were performing well, with HSBC up 0.6 percent, Barclays up 0.8 percent, and Fortis up 0.8 percent, while Alliance & Leicester gained 6.6 percent after reports it held tentative talks over a possible takeover by Spain's Santander early last month. Rumors that the two sides failed to reach an acceptable price were quashed by an FT report saying that Santander had not ruled out resuming takeover talks. Santander and A&L have declined to comment on the reports. Shares in Santander fell 0.4 percent.

Around Europe at 11:30 GMT Germany's DAX index was fractionally lower to unchanged and UK's FTSE 100 index and the CAC 40 were up just over half a percentage point.

Energy shares rose as crude oil futures bounced above $96 a barrel on supply concerns.

Total gained 0.9 percent, BP added 0.6 percent, and Royal Dutch Shell rose 1.1 percent.

On the macro front, U.S. ISM manufacturing data is expected at 1500 GMT.

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