London, March 29 - European stocks were flat on Wednesday after a mixed set of results from retailers, and as the Federal Reserve left the door open for more U.S. interest rate hikes.
UK grocery chain Sainsbury jumped 2 percent after comfortably beating sales growth estimates, but Ahold fell 5 percent as the Dutch retailer cut its 2006 retail operations forecasts.
By 0720 GMT, the pan-European FTSEurofirst 300 index was unchanged at 1,364.9 points, after falling 0.5 percent in the previous session and ending at two-week lows.
The Federal Reserve hinted on Tuesday at the possibility of more interest rate hikes after raising rates as expected by 25 basis points to 4.75 percent, which hit U.S. stocks and boosted the dollar.
"The Fed has kept the momentum towards a 5 percent rate following this latest hike -- only much softer data now will push them off this path," ING economists said in a note.
Shares in H&M lost 3 percent as the Swedish fashion company said March sales were weak in some areas after it reported first-quarter pretax profits in line with forecasts.
Bayer shed 3 percent after the company said it will issue a 2 billion euro convertible bond.
Thales rose 1 percent after Le Figaro said Alcatel hopes to announce on Thursday that it will raise its stake in the defence group.
Earlier, Tokyo stocks outperformed in Asian markets, and the Nikkei jumped 1.5 percent to 16,938.4 points, its highest close in 5-1/2-years, led by gains in technology stocks.