European shares steadied today as earnings news offset fresh political uncertainty a day ahead of the euro zone leaders' meeting that many hope will take a big step towards solving the region's two-year-old debt crisis.
Strong corporate results from the likes of oil and gas firm BG and Deutsche Bank, which both beat forecasts, helped underpin the market, after the market's recent two-day rally.
Earlier, the FTSEurofirst 300 index of leading European shares was flat at 988.89 points, after adding 1.1 per cent in the previous session, off its lows but in choppy trade.
Markets have risen ahead of the two-leg summit, fully expecting leaders to agree a comprehensive plan, in spite of clear differences on key elements including leveraging the bailout fund and Greek debt mark-downs.
A demand for signoff rights from German politicians on details of the plan, ahead of the Wednesday summit; combative comments from Italy's leader on the country's austerity reform plan and lack of agreement on changes to its pension system overnight were capping gains in early trade, traders said.
"Whilst official comments have stated that "good progress" is being made, behind the scenes things look a little shakier," Capital Spreads dealer Jonathan Sudaria said.
"German chancellor Angela Merkel must face down rebels in her domestic parliament once more to gain approval to increase the EFSF. Also, an emergency cabinet meeting in Italy on implementing austerity measures proved fruitless and failed to allay fears of debt contagion," he added.
