By ISHAQ SIDDIQI And AYAI TOMISAWA
European stocks recovered earlier losses to finish mostly flat, as strength in U.S. shares offered support despite continuing concerns about the euro zone's sovereign-debt crisis.
Worries over fiscally stressed European countries increased following new comments on the U.K.'s and Portugal's fiscal problems from Fitch Ratings, prompting investors to move into assets such as the dollar, bonds and commodities.
The pan-European Stoxx Europe 600 Index closed down 0.1% at 256.73.
In ATHENS, the ASE Composite Index trimmed steep losses to finish down just 0.1% to 2085.16. Banking stocks were in focus with National Bank of Greece up 1.2% and Alpha Bank down 1.1%. Both firms were downgraded by Deutsche Bank.
In MADRID, Spanish banks were also weak, with Santander down 1% and BBVA down 0.9%.
In LONDON, Lloyds Banking Group lost 0.9% and Royal Bank of Scotland Group fell 1.2%. The FTSE 100 lost 0.1% to 5602.30. Drug makers, which had a poor session on Monday on pipeline concerns, took back some ground on Tuesday, with GlaxoSmithKline up 1.6%.
In PARIS, Sanofi-Aventis rose 0.8% after the health-care giant said it will form a 50-50 animal-health joint venture with Merck. The CAC 40 added 0.2% to 3910.01.
In FRANKFURT, the DAX added 0.2% to 5885.89.
Tokyo stocks slipped Tuesday in lackluster Asian trade, as steelmakers and exporters succumbed to profit taking, while Fujitsu was hammered for a second day on concerns over its former president's resignation. Most other Asian markets rose marginally.
In TOKYO, the Nikkei Stock Average of 225 companies fell 0.2% to 10567.65 after rising 4.3% over the previous two sessions. Exporters were hurt as the dollar dipped below 90 yen. Advantest lost 1.3%. Among steelmakers, Nippon Steel dropped 1.1%.
Fujitsu slid 3.8% to its lowest close this year as investors continued to question whether a dispute over its former president's resignation would distract the company from pursuing its business strategy. The Tokyo Stock Exchange said it had launched an investigation to see whether the company intentionally hid information over the incident last year.
Shanghai and Hong Kong shares got help from an upbeat forecast from China Life Insurance and China Southern Airlines, whose shares jumped on plans to raise funds through a private placement.
In HONG KONG, China Life climbed 3% after the mainland insurance company said in a revised forecast that its 2009 net profit could rise more than 200% because of a change in accounting rules. The Hang Seng index added 0.1% to 21207.55
China Southern Airlines jumped 7.1% after the airline said it planned to raise 10.75 billion yuan ($1.57 billion) via a private placement to boost its capital.
Resource stocks around the region lost ground, after outperforming on Monday, as gold prices slipped. Zhaojin Mining Industry fell 1.4%.In SYDNEY, Lihir Gold shed 1.7%. Arrow Energy declined 1.8% after Monday's 47% surge in the wake of a takeover bid from Royal Dutch Shell and PetroChina.
The S&P ASX 200 added 0.3% to 4820.10.
In SINGAPORE, Singapore Airlines dropped 1.3% after Citigroup downgraded the stock to "sell" from "buy," saying the price seemed "to be running ahead of fundamentals."
George Kanaan, UBS's head of sales in Sydney, said the market is looking for more confirmation of a U.S. economic recovery and successful management of excessive growth in China.
"I see this market holding ground, then going higher. Europe is still the main concern, but in the past week or so, people are a little happier to take on risk."
Shares in the Americas rose.
In SÃO PAULO, Brazilian stocks bounced higher as home-building shares strengthened. The Bovespa index rose 1.5% to 69576.63.
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