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Bourses make gentle headway
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December 23, 1998: 5:54 a.m. ET
Merger speculation in the auto sector helps European markets move higher
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LONDON (CNNfn) - With investors more interested in buying last-minute presents than stocks, Europe's bourses opened in sluggish fashion Wednesday.
In addition to the usual seasonal lull, the impending introduction of a single currency across mainland Europe has dissuaded institutions from holding large open positions through the year end.
Markets in New York and Asia provided little incentive for European investors to indulge in any hectic activity.
All the major bourses moved into positive territory in early trade. London's FTSE 100 gained 9 points to 5,852.0, and France's CAC 40 crept up 13 points to 3,833.47.
The German and Swiss bourses, which open earlier, were slightly stronger. Frankfurt's Xetra Dax rose almost 1 percent to 4,924.20, and Zurich's SMI gained 65 points to 7,156.5.
Auto stocks provided the most excitement. Germany's BMW (FBMW) denied that it had been talking to U.S. giant Ford (F), as some had speculated earlier in the week. The German group did announce a $1.5 billion plan to build a new U.K. factory for its Rover unit. BMW shares, the strongest performers in Frankfurt this week, gained a further 11 marks to 1,220 marks.
Speculators were still keen to put Ford on the spot however, and attention has now turned to a possible deal with Sweden's Volvo. Volvo shares rose 10 crowns to 185 crowns.
Insurer Munich Re (FMUV2) continued its seemingly unstoppable recent rise. The shares gained 15 marks early Wednesday to 792 marks.
BMW's auto rivals headed upward. Volkswagen (FVOW) rose 3 marks to 134 marks, and DaimlerChrysler gained 3 marks to 157.6 marks.
London stocks moved in a very tight range, with little liquidity. The release of minutes from the Bank of England's Monetary Policy Committee's last meeting contained few surprises.
In Paris the whiff of speculation in the auto sector fed through to Renault (PRNO), sending the shares up 3 percent to 238 francs, and Peugeot (PUG) which gained 4 percent to 855 francs.
In Zurich Nestlé shares rose 39 francs to 2,894 francs. Financial groups also headed higher, with UBS up 8 francs at 428 francs and CS Group up slightly at 218 francs.
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