August 12, 2006	Saturday	Rajab 16, 1427

LONDON, Aug 11: European stocks ended mixed on Friday, a day after markets fell sharply after the UK authorities said they had uncovered a plot to bomb transatlantic airliners.

ThyssenKrupp fell eight per cent as dealers said worries about its automotive unit offset news about the German steel and engineering group's record quarterly pre-tax profit.

Michelin added 2.3 per cent after the French tyre group said it was planning to raise car tyre prices worldwide to compensate for higher raw material prices.

The pan-European FTSEurofirst 300 index closed up 0.1 per cent at 1,331.1, after falling 0.8 per cent in the previous session on news of the bomb plot. The index ended with a weekly loss of about one per cent. Volumes were sluggish at around 2.2 billion euros compared with average volumes of about 2.7 billion over the past three months.

Strategists said European stock markets would remain volatile due to inflation and interest rate worries.

Telecom shares extended losses, with the DJ Stoxx telecom sector index falling one per cent to a three-week low, hit by Deutsche Telekom's profit warning this week.

Shares in Europe's largest telecom group by sales tumbled three per cent to a more than three-year low of 10.8 euros and brokers downgraded the stock. Vodafone shed 1.8pc and France Telecom declined 1.5 per cent.

London's FTSE 100 index lost 0.06 per cent, Paris's CAC-40 was up 0.2 per cent and Frankfurt's DAX was down 0.05 per cent.

"While equities are still vulnerable in the medium-term, in the short term we expect the rebound to continue as risk appetite remains low and markets could get support from pricing in a peak of US interest rates," F&C Asset Management said in a note, referring to global equities.

"Our preference is towards more defensive sectors such as beverages and food & drug retailers -- areas able to display visible earnings growth despite any slowing of the global economic cycle," F&C said about European stocks.

Shares in staffing firm Adecco fell four per cent, reversing an earlier rally, as traders said margins on its business, particularly in France, disappointed despite forecast-beating quarterly profit.--Reuters