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Bourses firmer, but fidgety
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April 21, 1999: 1:04 p.m. ET
London shares end slightly off as traders exhibit caution; tech shares rally
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LONDON (CNNfn) - Leery that a bear market could be lurking around the bend, European traders kept their enthusiasm on a tight lead Wednesday, even as early gains on the Dow and a bounce in battered technology stocks lent some much-sought support to the continent's largest exchanges.
Europe's largest blue chip index, The FTSE 100, fell 0.14 percent, or 8 points, to end at 6,311, weighed down by a 3.3 percent slide in BP Amoco (BPA), which built on its previous session losses as crude oil prices languished below the $16-a-barrel level.
At the London close, the Dow Jones industrial average was 42 points higher at 10,490 in volatile trade. But traders remained jittery a day after the benchmark London index tumbled 3 percent, its largest percentage loss since Dec. 1, 1998.
The sell-off was triggered by a 5.5 percent slide on the tech-laced Nasdaq Monday. But a "rotation" out of high-growth stocks into industrial cyclicals, underway for about a week, provided another catalyst for the decline.
The electronically-traded Xetra Dax ended 1.45 percent higher at 5,175.57 in Frankfurt, while French shares rose 0.9 percent to 4,291.60 on the CAC 40 index of leading components.
Zurich's SMI slipped 0.07 percent, or 4.7 points, to 7,124.7 amid a sell-off in index heavyweight Novartis, which shed more than 3 percent to 2,265 Swiss francs after posting first-quarter results at the lower end of expectations.
Some of the technology issues that suffered the worst battering Tuesday made a cautious comeback Wednesday as investors spotted a buying opportunity.
Electronics retailer Dixons (DXNS), the pioneer behind Britain's first free Internet service provider, Freeserve, soared 5.85 percent to 1,297 pence, after diving 8 percent Tuesday. Informational technology firm Sema (SEM) spurted 4.38 percent.
British American Tobacco (BATS) surged nearly 9 percent to 510 percent after a ratings upgrade.
Telecom network operator Colt Telecom (CTM) added 1.21 percent, to 1,083 pence, while cable TV giant Telewest (TWT) edged up 0.89 percent to 255-1/2 pence.
In Frankfurt, German software maker SAP [FSE:FSAP3] blazed the hottest trail on the Dax, rocketing 17.8 percent after the company reported first-quarter earnings above expectations. SAP also forecast sales growth of between 20 and 25 percent this fiscal year. Electronics giant Siemens (FSIE) gained 4.28 percent after the industrial group reported a more than 17 percent rise in first-quarter sales and issued a rosy sales outlook.
Dutch drug and chemical giant Akzo Nobel produced first-quarter net profit of 173 million euros ($185 million), a slight fall on the previous year, but still at the top end of expectations. The shares closed up 4.8 percent.
New snags arose Wednesday over a possible mega-alliance between Deutsche Telekom (FDTE) and Telecom Italia, after the latter said late Tuesday it would agree to a deal as long as the Bonn government agreed to waive its voting rights in the 74 percent state-owned German telecom carrier.
Italy's regulatory watchdog, Consob, said it had asked Telecom Italia to provide more details on share exchange ratios in its proposed merger. Meanwhile, Germany's government, which owns 70 percent of Deutsche Telekom, said it should retain its voting rights after any merger.
An Olivetti adviser told CNNfn.com the company will formally launch its offer for TI Friday.
Telekom stock closed down 1.4 percent at 36.08 euros in Frankfurt, while Telecom Italia, which resumed trading in Milan Wednesday following a two-day suspension, rose 0.6 percent to 9.912 euros.
In Paris, two of Tuesday's leading decliners were among the gainers Wednesday. Chip maker STMicroelectronics (PSGS) closed up 3.52 percent at 98.50 euros, while Cap Gemini (PCAP) advanced 4.91 percent to 132.4 euros.
Oil stocks slipped slightly in London despite signs of a nascent recovery in crude prices following months at historically low levels.
Analysts said the rotation into cyclical shares has been spurred by signs of recovery in the European economy following recent interest rate cuts.
But the shift has been sporadic and many traditional cyclicals such as oil and chemicals posted losses Tuesday and Wednesday. 
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