By Helen Reid
LONDON (Reuters) - European shares dipped on Thursday, tracking more timid Wall Street trading as volumes thinned out for the Thanksgiving holiday, while euro zone stocks drove higher, boosted by strong business growth figures for the bloc.
The pan-European STOXX 600 (STOXX) slid 0.2 percent, while euro zone blue chips (STOXX50E) erased early losses to trade up 0.2 percent after business surveys for the bloc cemented optimism on the economy.
Euro zone businesses boomed into the year end as November composite, services and manufacturing PMIs beat all forecasts in Reuters polls.
"This supports our view that the economy is in a very healthy condition," said Britta Weidenbach, head of European equities at Deutsche Asset Management.
Societe Generale (PA:SOGN) strategists however warned "the eurozone recovery is now a well-known story", and were less enthusiastic about the potential for equities in the new year, adding that a heavy political agenda in Europe could affect markets.
British stocks lagged peers, down 0.3 percent, as energy firm Centrica plummeted after results.
Centrica (L:CNA) dropped 16.4 percent, set for its biggest daily drop ever, after it lost 823,000 or about 6 percent of its energy customers in four months and full-year earnings missed market estimates.
"The question now is whether this weakness will persist in to 2018, and the longer-term potential impact on the dividend," said Morgan Stanley (NYSE:MS) analysts.
Leading European gainers was Altice (AS:ATCA), jumping 4.7 percent after a report the debt-ridden French telecoms and cable group was looking to sell its telecoms network in the Dominican Republic.
Its shares are still down nearly 60 percent from the start of the year as funds sold out of the company's U.S. unit.
"The shares have de-rated but we remain neutral given our continued concerns about the long-term impact from Altice's strategy," said Credit Suisse (SIX:CSGN) analysts, adding the company's strategy shift and asset sales could however be an upside risk.
Thyssenkrupp (DE:TKAG) reversed early losses to trade up 1 percent after demand for elevators helped boost its orders to a five-year high.
Telecom Italia (MI:TLIT) shares rose 4.7 percent on speculation about a possible spin-off of its telephone network, and after the firm said it would work with Rome under special "golden powers" to protect it as a strategic asset.
"Ongoing discussions with Rome aimed at easing tensions are welcome," said Mediobanca analysts in a note, adding: "Network separation with disposal of minority stake would be a value creative option."
As the earnings season drew near its close, MSCI Europe earnings growth was tracking 10.1 percent in dollar terms while companies in the MSCI EMU enjoyed 11.1 percent earnings growth.
"The Q3 results season was exactly in line with our expectations, definitely supporting the view that the European equity market will show double-digit earnings growth this year in euro terms," said Weidenbach.
"This is really the turnaround that we were awaiting – beforehand we had not seen earnings growth over five years."
Analysts have been revising down earnings estimates for European companies this quarter. Deutsche's Weidenbach put this down to the strengthening euro denting expectations for earnings from foreign-exposed companies especially in healthcare and consumer staples.