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London - European shares were flat in choppy trade on Tuesday, with financials under pressure as concerns lingered over the financial health of euro zone peripheral countries, just offsetting strength in miners.
By 12:30 pm, the FTSEurofirst 300 index of top European shares was flat at 1 071.55 points, after ending at its lowest close in eight weeks on Monday as a bailout for Ireland failed to calm nerves over debt problems in the eurozone.
The index is on track to fall 1.5% in November, after two months of gains, partly on concerns over peripheral eurozone debt troubles.
Analysts said worries of an escalation of debt problems in Portugal and Spain was likely to unsettle financial markets in coming weeks as investors speculated about the next eurozone country to need financial help after Ireland received an €85bn rescue package.
"We will stay in choppy mode for the next few weeks as debt problems in the eurozone stay on investors' minds," said Heinz-Gerd Sonnenschein, equity markets strategist at Deutsche Postbank in Bonn.
"The market will also be looking ahead to economic numbers such as US job figures this week."
Jitters over eurozone debt problems pushed Spanish and Italian government bond yields to euro lifetime highs on Tuesday, while the euro slid to its lowest in more than 10 weeks against the dollar, yen, Swiss franc and sterling.
Portuguese banks Banco Espirito Santo and Millennium bcp shed 2.8% and 0.5% respectively after Portugal's central bank warned overnight that its country's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances.
Peers Societe Generale, Barclays and Allied Irish Banks were down 1.9% to 3.9%.
"The attempt of European politicians so far is one of trial and error. Poor data in combination with continued concern on the European debt situation could result in a much more severe sell-off," said Koen De Leus, strategist at KBC Securities.
On the upside, mining shares were among risers, shaking off weakness in the previous session and benefiting from a rebound in copper prices on worries over tight supply.
Anglo American, BHP Billiton and Rio Tinto added 0.5% to 0.7%.
Carmakers accerlerate
The equity market got some strength from data showing German unemployment fell modestly in November, fuelling hopes of sustained job creation.
Economy-sensitive automakers were among the gainers, with BMW, Daimler and Volkswagen up 0.9% to 1.9%.
French engineer Alstom rose 3% after broker Deutsche Bank upgraded its recommendation to "buy" from "hold", saying it is a high-risk but potentially high-return investment.
Positive broker comments also helped Luxottica rise 3.1% after Citigroup raised its recommendation on the Italian eyewear group to "buy" from "hold".
Germany's largest construction group Hochtief rose 3.2% after German markets regulator BaFin gave the go-ahead for Spanish rival ACS's hostile takeover offer.
