(by G. Andersen)

The FTSE Eurotop 300 added 0.3 per cent to 966.25 while the Xetra Dax in Frankfurt shed 0.1 per cent to 3,798.79. In Paris, the CAC-40 was down 0.1 per cent to 3,569.57, and London’s FTSE 100 climbed 0.7 per cent to 4,337.5.

SAP, the German business software maker climbed 2.9 per cent higher to €126.93 after Henning Kagermann, chief executive, said on Thursday that market demand was strengthening and that any weakness seen by its rivals mirrored gaining market share by SAP.

The company reported a 15 per cent rise in sales in the previous session and maintained full-year guidance, but any positive sentiment was lost amid Thursday’s declines. "SAP has, we believe, taken increased market share this quarter," said Credit Suisse First Boston in a research note. "As their market share increases, it will be increasingly likely for them to become a global standard."

Strong early gains for chip-related stocks began to fade, but most were still a little higher, with Infineon up 0.4 per cent to €9.41, while STMicroelectronics remained 0.3 per cent higher at €15.88.

Telenor, Norway’s biggest telecoms operator, jumped 4.3 per cent to NKr48.50 after beating expectations with a 31 per cent increase in second-quarter core earnings, thanks to robust growth in its international mobile operations.

The auto sector was in the spotlight in Europe, after Volkswagen shares rose 2.6 per cent to €33.51 after the company cut its full-year profit target by less than than most analysts had feared. This followed a 37 per cent fall in second-half pre-tax profit, blamed on sluggish demand, in part, due to high oil prices. The company also cited the "unfavourable exchange rate situation".

Valeo, Europe’s largest car parts maker, gained 1 per cent to €32.20 after reporting lower second-quarter net profit than a year ago due to fewer one-off gains. The company, however, increased its operating profit and beat analysts’ expectations on both counts.

Faurecia, the French maker of car seats and exhaust systems, announced better-than-expected first-half profits as sales rose 5.3 per cent. The company said it expected further growth in sales and operating margins in the second half. The shares traded 3.5 per cent higher at €58.05.

Banco Santander Central Hispano (BSCH) fell 4.1 per cent to €8.00 after confirming it had made an approach for the UK’s Abbey National, although there were no details about a potential price. See more

Elsewhere in the financial sector, Converium, the Swiss reinsurer dropped 6.5 per cent to Sfr27.25. Sector peers also suffered as Swiss Re slipped 1.7 per cent to Sfr70.95, Zurich Financial Services shed 1.7 per cent to Sfr171.75, and Germany’s Allianz fell 1.6 per cent to €78.60.

In the pharmaceutical sector, Serono, the Swiss drugs company, recovered slightly from Thursday’s slide to trade 2.3 per cent higher at €689.74. Investor concern over the disappointing sales of the company’s flagship drug Rebif moderated gains. Sector peer Schering of Germany gained 2.3 per cent to €134.00 having reported strong sales and earnings in the previous session.

Ryanair, the Irish budget airline, also recovered from a dive on Thursday after announcements of a lawsuit with BAA discouraged investors. The shares traded 2.1 per cent higher at €4.8.

French telecoms equipment maker Sagem reported a 32 per cent increase in first-half net profit, thanks to strong mobile handset sales. The company, which also supplies avionics systems to the defence industry, raised its full-year sales and profit targets. However, the numbers were below expectations and the shares fell 2.3 per cent to €81.75.