London - European stock markets drifted towards the end of the week on Friday after an early mini-rally petered out despite gains overnight on Wall Street.
The British FTSE 100 index of leading shares rose 0.19 percent to 4,049.3 points, the German DAX 30 index dipped 0.28 percent to 3,232.2 points and the French CAC 40 index lost 0.20 percent to 3,097.2 points.
The DJ Euro Stoxx 50 index inched down 0.08 percent to 2,451.0 points.
The euro was changing hands at $1.1426.
Markets got off to a good start after stocks forged ahead on Thursday in New York in a delayed reaction to a smaller-than-expected interest rate cut by the US Federal Reserve on Wednesday.
The Dow Jones industrials closed up 0.75 percent and the technology-laden Nasdaq composite won 1.96 percent.
With the main US official lending rate now at a 45-year low and tax cuts of $350 billion enacted by the US Congress, analysts are hoping for better times ahead for stock markets on both sides of the Atlantic.
Such factors suggest "that the underpinnings for the equity markets are much more solid now that they were three months ago or six months ago," said Brewin Dolphin Securities strategist Mike Lenhoff.
"I think what's happened is we've seen these markets come up a long way over the past few months and technically they were all very overbought and in need of a period of consolidation, which is now happening I feel.
"I think this pattern of sideways trading will allow the market to unwind its technical overbought condition, but the fundamentals are underpinning it so that by the time a few weeks have elapsed, I think the market will be in a stronger position to move ahead."
But with companies' second-quarter earnings expected to be undermined by the impact of the war in Iraq and the SARS virus, the next upswing may not come until around the time of the third quarter reporting season in October, he added.
In a quiet morning for corporate news, BAE Systems was among the early risers in London, gaining 3.1 percent to 142.25 pence after the Times reported that the company was close to winning a battle for a £10 billion defence contract.
In Frankfurt shares in RWE, Germany's second-biggest power supplier, slipped 2.6 percent to 26.41 euros as analysts gave a cautious response to the company's restructuring plan announced a day earlier.
"In our view, the target of 300 million euros of annual savings by 2006 makes for a very credible but also a less dramatic headline than might have been expected - management seems to have chosen the slow-and-steady approach of Aesop's tortoise, eschewing spectacular headlines and focusing instead on calm and predictable delivery," Deutsche Bank analysts commented. - Sapa-AFP