European markets struggled to make progress yesterday, torn between strength in the financial sectors and weakness in oil-related stocks.

Oil companies slid as crude prices dropped below $69 a barrel for the first time in three weeks. However, life and non-life insurers outperformed their weightings, climbing 0.9 per cent and 1.1 per cent respectively.

This left the FTSE Eurofirst 300 up 0.1 per cent at 1,399.35.

Leader of the pack was French insurer CNP Assurances, upgraded last week by WestLB, which added 4.3 per cent to €92.90. Domestic rival Axa gained 1.2 per cent to €30.36 after Bear Stearns reiterated its "outperform" rating ahead of the group's first-quarter results on Thursday.

Zurich Financial added 1.9 per cent to SFr315 after Merrill Lynch raised its price target from SFr350 to SFr365.

Among banks, Italy's Banca Monte dei Paschi di Siena added 3.5 per cent to €4.8760 after upgrades from Credit Suisse and Morgan Stanley.

Europe's leading investment banks made modest progress after last week's results. "We believe the market reaction reflected 'expectation inflation' in the run-up to the results," said Richard Ramsden at Goldman Sachs. He said recent weakness presented an "interesting entry point". The shares of Credit Suisse added 0.3 per cent to SFr77.90, while Deutsche Bank gained 0.4 per cent to €99.20 and UBS added 1.1 per cent to SFr150.60. ABN Amro rose 1.7 per cent to €23.39 and UniCredit added 1.9 per cent to €6.22.

Holcim, the Swiss cement maker, gained 3.3 per cent to SFr109.10 after a forecast-beating performance at Thailand's Siam City Cement, in which it owns a 32 per cent stake.

Rival Heidelberg Cement gained 4.5 per cent to €103.63.

EADS gained 3.3 per cent to €31.36 after Merrill Lynch upgraded its recommendation to "buy" from "neutral" on hopes it will launch a new Airbus A350 in the summer.

Among the earnings reports yesterday, Statoil fell 3.1 per cent to NKr201 after its quarterly earnings failed to meet expectations. It reported a 44 per cent jump in first-quarter operating profit and stuck to its targets for 2006 and 2007.

The oil sector fell 1.5 per cent after crude prices fell sharply. Statoil's domestic peer Norsk Hydro fell 3.2 per cent to NKr940. Austrian oil group OMV said it was in talks with Verbund, the country's biggest utility, about a tie up to exploit synergies in their power and gas divisions. The stock, however, fell 5.1 per cent to €53.40. - (Financial Times service)