European shares ended higher on Tuesday as a decline in crude oil prices eased concerns about the pace of global economic recovery, though technicals suggest short-term gains could be limited. A jump in Deutsche Telekom on renewed talk that the company and Sprint Nextel may be in discussions to combine their operations in the United States boosted telecom shares. However, miners tracked a drop in key metals.
Greek shares fell 3.8 percent, while the banking index dropped 6.3 percent. National Bank and EFG Eurobank fell 6.8 percent and 6.1 percent respectively, a day after Moody's cut Greece's credit rating by three notches, raising the spectre of a debt restructuring.
The FTSEurofirst 300 index of top shares closed 0.3 percent higher at 1,147.43 points, with volume at 103 percent of the 90-day daily average. The euro zone's blue chip Euro STOXX 50 index rose 0.5 percent to 2,945.42 points. Charts indicated the market's gains could be limited.
The STOXX 50 traded below its 50-day moving average of 2,948.15 and hovered near the bottom of its short-term uptrend channel. Telecom shares were among the top gainers, helped by merger talk and on an upbeat note from Morgan Stanley, which raised its overall stance on telecoms services to "attractive", saying downside risks in the sector were less pronounced, traders said.
The European telecom sector index rose 1.9 percent, with Deutsche Telekom advancing 4 percent. The stock's volume was nearly 400 percent of the 90-day daily average. Miners topped the decliners' list as nickel prices fell more than 2 percent, though copper recovered after earlier losses. The STOXX Europe 600 Basic Materials index was down 0.9 percent, while Antofagasta fell 2.7 percent.