March 30, 2017 / 7:37 AM / a year ago

European shares muted as investors mull Brexit, oil provides support

LONDON, March 30 (Reuters) - European shares struggled for direction in early deals on Thursday as investors mulled implications of Britain formally beginning the process of leaving the European Union the day before.

The pan-European STOXX 600 index was flat in percentage terms, with regional indexes trading flat to slightly higher.

The reaction to Britain formally triggering the Brexit process on Wednesday was fairly muted from European shares, with the FTSE 100 index also ending higher as sterling weakened. The FTSE 100 traded 0.1 percent higher on Thursday.

As Britain embarked on a path of tough negotiations, all eyes turned to the government’s White Paper, in which it will set out plans to convert European Union laws into domestic legislation.

A rise in oil stocks lent support, with the sector gaining 0.7 percent as crude prices ticked higher.

Broker upgrades also helped the top gainers, with Ashtead up 2.8 percent after Liberum began their coverage of the stock with a “buy” rating, and shares in Dixons Carphone were also boosted after Barclays began with an “overweight” rating.

UK grocer Morrison’s also rose 2.1 percent, while retailer H&M gained 1.3 percent after posting a smaller than expected fall in pretax profit for its fiscal first quarter and said that it would launch a new separate brand in the second half of the year.

Autos were the biggest sectoral faller, down 1.2 percent and led lower by a fall in Daimler’s shares, which traded without entitlement to its latest dividend payout. (Reporting by Kit Rees; Editing by Alison Williams)

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