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London - European shares edged higher on Thursday, recovering some of their poise after the previous session's declines, helped by BP which won a reprieve over Gulf spill payouts.
BP rose 0.7%, one of the top individual points contributors to the FTEurofirst 300, after a US court decision potentially sparing the oil company billions of dollars of extra costs over the 2010 Gulf of Mexico oil spill.
"This is a small, albeit important, bit of news for BP. We think that the market has unjustifiably marked down the price given the lack of clarity on the upside cost it may face and the overhang of the Macondo situation," Atif Latif, director at Guardian Stockbrokers, said.
Latif said that, with the start of more positive news flow coming through and with the large discount to the sector and peers, he remained positive on the outlook for BP.
BP shares, which have fallen more than 30% since the Macondo well suffered a blowout in April 2010 resulting in the oil spill, trade on a 12-month price/earnings ratio of 7.9 times, against the STOXX 600 Oil & Gas sector on 9.5 times, Thomson Reuters Datastream showed.
The FTSEurofirst 300 was up 0.1% at 1 248.24 points by 12:55, having dropped 0.7% on Wednesday. The eurozone's blue-chip Euro STOXX 50, meanwhile, slipped 0.1% to 2 914.98 points.
The market could struggle to make much headway given the likely impact of the US government shutdown on talks to raise the country's debt ceiling by mid-October. Failure could push the world's biggest economy into default and hurt the pace of economic recovery.
But expectations that recent downbeat economic numbers would force the US Federal Reserve to keep its policies loose for longer alongside upbeat services PMI data from the eurozone and China helped underpin equities.
"Markets still expect that eventually some sort of solution will be found (in the United States), otherwise they would correct much more," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
"They might get spooked a little bit more but we would consider that a buying opportunity because ... monetary conditions will remain very expansionary even if you get some sort of (US stimulus) tapering (and) the world economy is picking up."
Barclays Capital technical analyst Lynnden Branigan said that Wednesday's "inside" move on the Euro STOXX 50 - where all of the trading activity was inside the range of the previous day - "speaks of the indecisiveness in the market place".
Branigan reckoned that until later in the month, the index will trade within the range seen over the last two weeks - between 2 955 and 2 877.
"I don't think there's the impetus in the market to push it either way."
