UPDATE 1-European shares tepid despite surprise regional economic recovery
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STOXX 600 index down 0.1%
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Euro zone composite PMI rises more than expected
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EssilorLuxottica rose on upbeat Q1 revenue
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SAP down on slightly lower outlook
(Updates prices, adds details and comments)
By Shubham Batra
April 21 (Reuters) - European shares struggled for direction on Friday, set to close the week flat after a fourth weekly gain, as investors eyed more corporate earnings for cues on sector rebound, while the euro zone's economic recovery unexpectedly gathered pace this month.
The pan-European STOXX 600 index edged 0.1% lower, but hovered close to a 14-month high.
Healthcare shares rose 0.9%, led by EssilorLuxottica SA that jumped 5.9% after the luxury eyewear maker reported a rise in first-quarter revenue on a rebound in China-led growth.
Miners, however, were the biggest laggards in the index, nursing a 2.4% slump, tracking copper prices lower on lacklustre demand outlook.
Shares of Rio Tinto fell 4.2% after JP Morgan cut the stock's target price.
Britain's blue-chip index edged 0.1% higher after UK consumer confidence data showed British citizens this month were at their most upbeat in more than a year, despite the cost-of-living crisis.
"We don't think that the earnings season can be a big driver in the euro zone because not many companies report for the first quarter," said Michele Mora, portfolio manager at Moneyfarm.
"The main driver aside of the daily movement will likely be on what's happening in the world and the macroeconomic data in the U.S. and also monetary policy."
Economic recovery at the euro zone has unexpectedly gathered pace in April as the bloc's dominant services industry saw an already buoyant demand rise, more than offsetting a deepening downturn in manufacturing, surveys showed.
European stocks have gained more than 2% so far this month as fears of a banking crisis abated and investors looked ahead for the earnings season.
Mercedes-Benz Group AG climbed 1.4% as it posted first-quarter group adjusted return on sales of 14.8%, above market expectations, boosted by higher prices and strong demand.
Shares of payment provider Network International were up 1.4%, their highest levels since June 2021, after the company said it received a bid from Brookfield Asset Management .
Business software maker SAP SE recouped losses, adding 0.3%. The company slightly lowered its outlook due to the divestment of its Qualtrics unit while reporting estimate-beating first-quarter revenue growth.
European Central Bank Vice President Luis de Guindos said the underlying inflation will come down, but is proving sticky and needs to ease further from rather high levels.
(Reporting by Shubham Batra in Bengaluru; Editing by Varun H K and Sherry Jacob-Phillips)
