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London, Zurich lift the gloom
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March 22, 1999: 6:25 a.m. ET
European markets stage a mini-recovery, but performance is patchy
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LONDON (CNNfn) - London followed Zurich into positive territory Monday morning after Europe's bourses shook off some of their disappointment at Wall Street's repeated failure last week to stay above the 10,000 mark.
The recent boost to European investors from a surging Tokyo market was missed. Japanese markets were closed for a national holiday.
Though the Dow Jones industrial average meandered past the milestone on several occasions last week, its failure to stay firmly put in five-digit turf dismayed some who had been hoping for more. The Dow closed off 94.07 points Friday at 9,903.55.
London's FTSE 100 recovered from a depressed opening to push 19 points higher at 6,182.2. Hopes of further interest rate cuts were spurred by a downward revision in gross domestic product growth for the final quarter of 1998.
The Swiss market had earlier moved into positive territory. The SMI was almost 15 points higher at 7,223.2.
Frankfurt and Paris also made up some lost ground Monday. Frankfurt's electronically-traded Xetra Dax was 0.77 percent lower at 5,069.22, while the CAC 40 was just 10 points into the red at 4,209.60.
Europe's banking sector embarked on a further leg of consolidation Monday after four of Italy's top banks looked set to combine in two separate deals.
UniCredito Italiano, Italy's largest bank in market capitalization, launched a $16.4 billion share swap offer for Banca Commerciale Italiana.
Almost simultaneously, Sao Paolo-IMI - Italy's biggest bank in asset terms - launched a friendly bid for Banca di Roma, crushing UniCredito's hopes of topping the banking league.
These bids caused upheaval on the Milan bourse and trading was suspended temporarily.
After trading resumed mid-morning, Unicredito shares fell 0.16 euros to 5.12, while Banca Commerciale was up 7.5 percent at 7.74 euros. Sao Paolo fell 3 percent to 15.30 euros and Banca di Roma was up over 8 percent at 1.535 euros.
In London, the biggest gainer was nuclear power generator British Energy (BGY). The stock was up almost 5 percent at 542 pence. Philip Hollobone, electricity analyst at WestLB Panmure said the market was reacting to reports that the regulator would block its 1.4 million pound bid for the coal-fired power stations being sold by PowerGen (PWG).
The reasoning is that if the deal is blocked then the generator will use its strong balance sheet to buy back shares, said Hollobone.
Telewest (TWT) was also up strongly on the back of the $60 billion Comcast-MediaOne merger. MediaOne is a large Telewest shareholder. The shares were up 4.84 percent at 247 pence.
Retail bank Woolwich (WWH) was the biggest loser, off over 5 percent at 361 pence, after the stock went ex-dividend Monday.
In the luxury goods sector, French luxury goods group LVMH (PMC) may yet get its golden chalice after Italian fashion company Gucci said Monday it would seriously consider an $81-per-share offer by LVMH for 100 percent of the firm.
The offer comes after Gucci announced a surprise deal Friday to sell a 40 percent stake in the company to white-knight suitor Pinault-Printemps Redoute (PPP), for $2.9 billion; LVMH responded by suing to nullify the offer by the French retail group.
Gucci was up more than 8.5 percent Monday in Amsterdam, at 72.7 euros. LVMH's shares were 0.2 euros lower at 234 euros in Paris and Pinault's stock was off 0.5 euros at 149.5.
In Frankfurt, Lufthansa (FLHA) shed 0.61 euros to 21.45, a 2.7 percent drop, while HypoVereinsbank (FHVM) stock dipped after the bank's chairman resigned at the weekend, sending the shares down 0.61 euros to 56.39.
French utility conglomerate Vivendi (PEX) was suspended before the open, on expectations the group would announce the $6 billion takeover of U.S. Filter (USF).
--from staff and wire reports
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