* FTSEurofirst 300 ends flat after late recovery
* Investors wary after Malaysian plane downed over Ukraine
* Heightened international pressure seen helping end crisis
* Swedish stocks rise on earnings boost
By Francesco Canepa
LONDON, July 18 European shares ended flat on
Friday as the prospect of heightened tensions between Russia and
the West capped appetite for risk assets and offset strong
earnings reports from Sweden.
Investors were reluctant to open new long positions after a
passenger plane was shot down over Ukraine on Thursday, and
fears were that the situation would deteriorate at the weekend.
But selling pressure eased and volatility fell during the
day with the loss of the Malaysian jet with 298 people aboard
also seen as intensifying international pressure to resolve the
worst crisis between Russia and the West since the Cold War.
Fighting between the military and pro-Russian separatists
has killed hundreds in Ukraine since protests toppled its
Moscow-backed president in February and Russia annexed the
"It's so serious that maybe people will pull back from the
conflict now," Peregrine & Black senior sales trader, Markus
The pan-European FTSEurofirst 300 index ended flat
at 1,363.11 points, with a rebound on Wall Street helping the
index erase most of the session's losses in late trade.
The Euro STOXX Volatility index, which measures the
price of options on euro zone blue-chips, effectively gauging
investors' fears of future losses, fell 6.3 percent after
hitting a two-month high in early trading.
The market was supported by a number of strong profit
reports from Sweden, with mobile telecom gear maker Ericsson
, home appliances firm Electrolux and
Swedbank all reporting expectation-beating results.
Ericsson rose 8.2 percent, leading peers Alcatel
Lucent and Nokia higher, as its results
showed sales picked up at its networks unit thanks to growth in
the Middle East, China, the United States and India.
"Ericsson's sales in the U.S. were very resilient," Kepler
Cheuvreux analyst Sebastien Sztabowicz said, flagging a positive
read-across for Alcatel ahead of its own quarterly results.
With 12 percent of companies in the Europe STOXX 600
having reported results so far this earnings season, 73
percent have beaten or met expectations, according to Thomson
Reuters StarMine data.
Stockholm's OMXS index rose 0.8 percent.
Swedish truck maker Volvo bucked the trend,
falling 5.4 percent after posting a smaller-than-expected rise
in profit after a slow rebound in demand in Europe left it with
It led a sell-off across the sector, with Daimler
and CNH Industrial down 1.7 percent and 0.9 percent
"You saw that for every major truck maker ... the recovery
seems to have started later than anticipated," Natixis analyst,
Kathleen Gailliot, said. "The potential is there but you have
got to have a bit of improvement in confidence."
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Alistair Smout; Editing by Louise