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Bourses defy Dow, euro
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June 2, 1999: 1:13 p.m. ET
European markets shrug off euro's fall, U.S. inflation fears to close in black
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LONDON (CNNfn) - European markets all managed to hold on to gains at Wednesday's close, despite an early slump on Wall Street caused when a report on new home sales renewed concern about inflation and interest rates.
Most markets endured a jittery session, however, as investors rode out another low for the euro and subsequent supportive comments from European Central Bank President Wim Duisenberg.
London's FTSE 100 ended 52 points higher at 6,302.2, a rise of 0.84 percent. Germany's Xetra Dax, which will close for a public holiday Thursday, ended 0.59 percent higher at 5,040.34, a rise of just under 30 points.
In Paris, CAC 40 just managed to finish in the plus column, as it closed less than 2 points higher at 4,315.34. Zurich posted the biggest rise of the day as the SMI index of leading shares jumped almost 93 points to end at 6,970.8, a rise of 1.35 percent.
Stocks were relatively unperturbed by the fall on Wall Street as many European investors stayed on the sidelines ahead of the key U.S. employment data due out Friday. The Dow Jones industrial average fell almost 120 points in early trade as surprisingly strong home sales for April added to fears that higher interest rates were just around the corner.
London's blue chip index was buoyed throughout the session by strong buying of the two pharmaceutical heavyweights on merger speculation. SmithKline Beecham (SB), which has been linked with the Swiss drug company Novartis, closed more than 4 percent higher -- one of the strongest performances in the FTSE.
Its U.K. rival Glaxo Wellcome (GLXO) ended 2.8 percent higher, while Novartis itself put on 18 Swiss francs to end at 2,271 in Zurich.
London's best blue-chip performer was the engineering group Invensys (ISYS), which soared more than 11 percent to end at 301 pence, after posting a 13.5 percent rise in operating profit to 998 million pounds ($1.6 billion) for the year ended March 31.
But even that impressive jump was overshadowed by former blue chip index constituent British Steel (BS.). The long-suffering steel maker watched its stock rocket over 22 percent to 159 pence, after the Dutch steel and aluminum company Hoogovens confirmed it was holding talks with the U.K. company about a possible merger. The Dutch company's shares lifted 0.53 percent to 37.90 euros in Amsterdam.
Supermarket operator J. Sainsbury (SBRY), Britain's second-largest food retailer, closed 2.3 percent higher after posting a 4 percent rise in full-year profit to 756 million pounds ($1.21 billion). The firm said it will cut 1,100 jobs in a bid to revive its flagging fortunes in the face of intensifying competitive pressures in the sector.
Bank of Scotland (BSCT) was a big loser Wednesday as investors showed their displeasure at controversial remarks made by outspoken American evangelist Pat Robertson, who is due to chair the bank's direct banking venture. The stock shed 3.85 percent.
In Paris, stocks traded in a tight range, with few making much headway. IT consultant Cap Gemini (PCAP) shook off weakness among U.S. tech stocks to add 2 percent at the close.
The biggest faller among the blue chips was the world's No. 1 building materials group, Lafarge (PLG), which slumped more than 5 percent to 88.30 euros after British cement maker Blue Circle (BCI) revealed it was in talks to buy South Korea's Halla Cement in conjunction with the French company.
In Frankfurt, trading was constrained ahead of the market holiday Thursday. A 9.5 percent jump in unit sales during the first five months of the year helped Volkswagen (FVOW) rise 2.6 percent in early trading, but this had fallen back to a 0.6 percent gain by the close.
Deutsche Bank (FDBK) closed 1.9 percent higher at 51.95 euros after the bank said its merger with Bankers Trust (BT) would be completed by June 4.
Chemical company Hoechst (FHOE) fell by a similar amount in a belated reaction to Tuesday's announcement that it planned to dispose of most or all of its 45 percent stake in Swiss specialty chemicals maker Clariant.
Clairiant's stock fell 1.3 percent to 665 Swiss francs in Zurich.
The biggest loser in Frankfurt was sports goods maker Adidas Salomon (FADS) which fell 3.4 percent as investors pocketed profits on the back of recent strong gains.
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