European equities were flat around midday on Thursday as weak energy shares offset a rebound in recently beaten-down retailers, recovering after Sainsbury helped reassure about the sector, according to reuters. Investors were cautious ahead of interest rate decisions by both the Bank of England and the European Central Bank, expected at 1200 GMT and 1245 GMT respectively, and ahead of a key speech by U.S. Federal Reserve Chairman Ben Bernanke later in the session. At 1140 GMT, the FTSEurofirst 300 index of top European shares was down 0.04 percent at 1,448.45 points, after dropping 1.2 percent on Thursday. The index is down 3.7 percent so far in 2008, as worries over the prospect of a U.S. recession hit markets worldwide. "Mounting recession fears and an earnings revision trend still pointing south were confirmed as the expected catalysts. The persistently weak U.S. economic numbers recently confirm our picture of a strong growth slowdown, which should continue in the next 2 quarters," Gerhard Schwarz, head of global equity strategy at UniCredit Markets & Investment Banking, wrote in a note. Energy shares fell along with crude oil prices. Total was down 1 percent and BP down 0.9 percent. Shares of retailers bounced back after sinking on Wednesday following Marks & Spencer's disappointing results and gloomy outlook. Shares in Sainsbury rallied 7.4 percent after Britain's third-largest supermarket chain met analysts' expectations with its quarterly trading figures, while Germany's Metro jumped 6 percent after it posted strong quarterly sales The DJ Stoxx index of European retailers is still down about 12 percent so far this year on concerns over consumer spending in Britain and the United States. "Quite frankly, we want to see some better macro data and also company results are starting to come out now," said Edmund Shing, a strategist at BNP Paribas in Paris. "We want to see some reassurance that the world is not going to hell before we can bounce back more meaningfully." Scottish & Newcastle gained 1 percent after the brewer rejected an increased bid from Carlsberg and Heineken at 780 pence a share, or 7.6 billion pounds ($14.9 billion), but said it would talk if the offer was at least 800p. Carlsberg was down 3.3 percent, while Heineken fell 3.2 percent.
