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Europe cautious at open
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October 23, 1998: 4:48 a.m. ET
Bourses unlikely to post big gains ahead of Dow's open, say analysts
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LONDON (CNNfn) - European bourses eased in cautious early trade Friday, with traders waiting for signs of the direction Wall Street will take.
At the open, London's FTSE 100 index fell 4.7 points to 5,225.2 while Frankfurt's Xetra Dax dipped 5.09 points to 4,444.03.
In pre-trade the Paris CAC 40 index edged 0.32 percent lower from yesterday's 3,420.92 close.
Finnish shares gained ground after good third quarter earnings figures from Nokia whose profit before tax almost doubled to 4.08 billion markka ($813 million). The first nine months showed a rise to 9.63 billion markka.
Nokia was up 24 markka to 445 markka on the results.
But with little other major corporate news around, analysts predicted most European markets would be flat or only a little higher.
Standard Chartered chief treasury economist Tim Fox said the decision by the Bundesbank to keep rates on hold, though expected, had created a "subdued atmosphere."
He added: "I'm not looking for big moves. I think Europe is sitting on its hands ahead of rate cuts."
BT Alex Brown European analyst James Cornish said the Dow Jones' seventh consecutive rise would boost London but other factors would weigh elsewhere.
"It is a definite positive and will help the UK particularly," he said. "For continental markets the mark's strength against the dollar is a bit of a negative.
"But I think there are enough disappointed potential buyers who missed the market at the bottom when it was off 15 percent back in October so we will generally be up today."
Jerry Evans, European strategist at Enskilda Securities warned that the markets had lost a sense of realism by reacting positively to poor corporate results from companies like ICI and Proctor and Gamble.
"It looks pretty quiet and dead today," he said. "There are a lot of positives being built into this market. A couple of weeks ago everything was negative."
With a meeting of European leaders in Austria this weekend and elections in Brazil on Sunday, next week could start with a dose of reality.
"There is more of a possibility of bad news to bring some sanity to this market," said Evans.
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