European stock markets ended the day roughly where they began as investors balanced news of unexpected banking losses at Credit Suisse (NYSE:CS) against better results from Barclays (NYSE:BCS).
The UK bank, which avoided nasty shocks on credit market exposure, helped the European banking sector overcome early weakness following large writedowns from Credit Suisse.
The Swiss bank wrote down the value of asset-backed investments by $2.85bn, which it said would erase $1bn from its first-quarter net income.
CS Group had been seen as one of the few to escape the worst of the subprime mess.
Credit Suisse shares fell 6.6 per cent to SFr53.
Still, the FTSE Eurofirst 300 proved resilient, buoyed by a positive open in the US after Wal-Mart posted better than expected results. The index closed up 0.2 per cent at 1,337.54, overturning earlier losses of more than 1 per cent.
Frankfurt's Xetra Dax was up 0.5 per cent at 7,002.29 and the CAC 40 in Paris climbed 0.5 per cent to 4,885.83.
CNP Assurances, the French insurer, rose 6.8 per cent to EU73.31 on speculation that its state-owned controlling shareholders were considering full privatisation of the company.
Les Echos, the French business paper, reported that a number of companies including French insurer AXA and Italy's Generali were looking at CNP.
Outside the financial sector, Norwegian aluminium producer Norsk Hydro (NYSE:NHY) fell 4.7 per cent to NKr71 after missing forecasts with its fourth quarter operating profit and warning of supply disruptions in the first half of 2008.
Verbund shares rose 7.15 per cent to EU49 after Merrill Lynch added the Austrian company to a "most preferred" list of utilities. Merrill said 2008 could be a "bumper year" for Verbund as global coal prices, which have surged in recent weeks, could push up power prices.
EADS shares rose 4 per cent to EU17.75 as its airplane making unit, Airbus, said Korean Air had ordered three more A380s in addition to the five it ordered in 2003.
Reports that Air France-KLM wants to buy 100 per cent of Alitalia, drove Air France's share prices up 3.2 per cent to EU18.63. The company is ready to inject EU3bn into the Italian carrier over six years, the vice-chairman of Air France said.
Elsewhere, German consumer-facing retail companies took hits. Morgan Stanley downgraded Metro, one of Germany's biggest retailers, from "equal-weight" to "underweight".
Morgan Stanley said Metro's consumer electronics chain was vulnerable to the weakening economic and product cycles.
Metro shares fell 2.5 per cent to EU55.97.
Henkel, whose businesses include cosmetics and toiletries, also fell 2.4 per cent to EU27.86 on concerns that the company could undertake an equity issue as part of its purchase of businesses from Akzo Nobel.
Merck, the pharmaceuticals and chemicals company, fell 1.8 per cent to EU81.98 after UniCredit cut its price target from EU107 to EU94.
On Monday Merck missed fourth quarter operating profits expectations and noted margins in its liquid crystals business would decline.
Norway's Renewable Energy Corporation, a maker of silicon materials used in solar energy, continued its advance, rising 6 per cent to NKr151.75 in spite of a headwind of analyst downgrades.
Credit Suisse cut its price target from NKr173 to NKr168 while Morgan Stanley downgraded the company from "equal-weight" to "underweight".