European shares edged lower on Thursday, giving up some gains from the previous session, and strategists said the market would remain rangebound until there was some sort of resolution to the euro zone debt crisis.
Banks rose, but several other companies, such as luxury fashion retailer Burberry, fell on cautious outlook statements.
The FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,125.17 points at 5:36 a.m. EDT, after rising 0.7 percent in the previous session. The index is up just 0.3 percent in 2011. Analysts said a report that China and other Asian investors would buy a "strong proportion" of Portuguese bailout bonds when the euro zone's rescue fund starts auctioning them next month would help sentiment.
But they also said this would have only a limited effect on the bigger euro zone debt picture.
"By and large, we are still rangebound. There are ongoing concern about eurozone peripheral debt," said Jeremy Batstone-Carr, strategist at Charles Stanley.
"We are not out of the woods by any stretch of the imagination.
Burberry fell 3.1 percent, handing back some of their recent heady gains, after the British luxury goods group said a step up in investment would hit first-half profit margins and result in a "modest" increase for the full year.
Banks gained for a second day, having hit "oversold" territory in technical terms earlier in the week, with the Relative Strength Index of the STOXX Europe 600 Banking index .SX7P falling below 30, on worries about exposure to Greek and other euro zone debt, as well as the possibility that European bank stress tests would highlight undercapitalization.
Austrian lender Raiffeisen Bank International rose 2 percent after first-quarter net profit beat market expectations as provisions for bad loans fell by more than a third.
Others in the sector to gain included Banco Santanderand BBVA, up 0.9 and 1 percent respectively.
Across Europe, Britain's FTSE 100 rose 0.2 percent; France's CAC40 and Germany's DAX rose fell 0.6 and 0.3 percent respectively.
The Thomson Reuters Peripheral Eurozone Countries Index .TRXFLDPIPU was up 0.7 percent.
DAILY MAIL FALLS
Among individual companies, Daily Mail & General Trust dropped 5.6 percent, after the media group accompanied in-line first-half results with a cautious outlook statement.
Most strategists continued to argue that corporate earnings have been generally positive for markets.
With some 93 percent of companies in the STOXX Europe 600 .STOXX due to report earnings in the current season having done so, 57 percent of that proportion have beaten or met forecasts, according to Thomson Reuters StarMine data.
Global delivery firm TNT Express rose 9.4 percent on its first day of trading, after splitting off from TNT. The remaining part of TNT fell 9 percent.
"I can't see any scenario other than a rangebound market for the next couple of months," said London- based James Buckley, fund manager at Baring Asset Management, which has 30 billion pounds under management.
"Corporate earnings are supportive, but on the other hand, the macro picture is posing some questions. You've almost got a perfect offset there."
Buckley said shares would be higher by year-end, supported by mergers and acquisitions activity. "And maybe, the Greek issue being kicked into touch, with a piecemeal solution, although there may not be a resolution."