European Markets Flat, Asia Gains

David McHugh

LONDON -- European stocks searched for direction Monday, closing little changed amid ongoing concerns about the sustainability of recent market gains. Asian shares rose, shrugging off reports of a nuclear test by North Korea.

Germany's DAX index of blue chips closed down 0.3% at 4918.45, while the French CAC-40 index rose 0.2% to 3236.16. The London and New York stock exchanges were closed for national holidays, a bank holiday in Britain and Memorial Day in the United States.

Shares in Europe recovered in the afternoon after falling after the open on news that that closely watched Ifo institute's survey of German business confidence rose less than expected in May. Sluggish demand weighed on construction and manufacturing in Europe's largest economy as the index increased to 84.2 points in May from 83.7 points in April.

In France, drug maker Sanofi-Aventis(SNY Quote) was among the CAC-40 gainers, up 1.6% on news of a $190 million order for swine flu vaccine from the U.S. government.

That was the second consecutive increase since March, when the indicator hit a 26-year low of 82.2 points, but short of the 85.9 points Ifo had expected and the 85 points predicted by UniCredit.

Global stocks have been seeking direction after solid gains in recent weeks. Backward-looking data such as growth and manufacturing output have been dismal, but some indicators of future activity have been more positive. Investors were looking ahead to key U.S. economic reports this week, including home sales, big-ticket manufactured goods and consumer confidence.