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Bourses post big gains
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July 1, 1999: 1:00 p.m. ET
Relief rallies across Europe send indexes sharply higher; Paris hits record close
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LONDON (CNNfn) - European financial markets rocketed to sharply higher closes Thursday after the U.S. Federal Reserve's decision to adopt a "neutral" interest rate bias lifted the floodgates on a surge of pent-up buying demand. London shares surged 170 points, their biggest single-session point gain in nearly six months. Paris stocks hit a record high.
In a series of across-the-board rallies marked by triple-digit point gains on three of Europe's most closely-monitored indexes, investors showed their palpable relief that the Fed's quarter-percentage-point interest rate hike Wednesday may be its last for awhile.
Bank stocks, which are seen as especially vulnerable to fluctuations in interest rates, posted stellar gains across the region.
The benchmark FTSE 100, Europe's leading stock gauge, closed up 170.4 points, or 2.7 percent, at 6,488.9, its biggest one-day point gain since Jan. 18. Rate-sensitive financial stocks contributed about 46 points of the blue chip index's 170-point advance.
Barclays (BARC) jumped 3.74 percent, Lloyds TSB (LLOY) leapt 2.15 percent, Norwich Union (NU) gained 2.61 percent, and Standard Chartered (STAN) added a whopping 4.54 percent, edged out by Bank of Scotland (BSCT) and HSBC (HSBA), which galloped up 5.06 percent and 5.3 percent, respectively.
In Paris, blue chips on the CAC 40 barreled up 72.65 points, or 1.6 percent, to a lifetime closing high of 4,609.26. Earlier in the day, the CAC 40 hit an intra-session peak of 4,637.68, well clear of the previous high-mark of 4,587.97 struck on June 21.
Frankfurt's electronic Xetra Dax advanced 101.70 points, or 1.89 percent, to 5,480.22 amid sharp strides in the banking sector. But strong economic data in the United States triggered fears of further hikes, dampening the mood on the Dax and braking its advance past the 5,500 resistance level.
Zurich's SMI shot up 2.64 percent to 7,091.5 as investors flocked back to market in the wake of the Fed rate decision.
The dollar's strength against the euro contributed to the upbeat mood in Europe, boosting shares in export-oriented companies. Europe's single currency hit a new low against the dollar of $1.0201 Thursday.
The leading gainer on the FTSE 100, electronic retailer Dixons (DXNS) surged 8.44 percent after announcing a float earlier this week of its free Internet-access service, Freeserve.
Media stocks also caught fire. Speculation that publisher Emap (EMA) may bid for rival Wagadon boosted Emap stock by almost 3 percent to 1,142 pence. Blue-chip rival Reed (REED), which has been in the doldrums recently, hoped the rallying bandwagon, jumping almost 6 percent to 430 pence.
Cellular stocks faced a two-way pull. Orange (ORA) rose 1.67 percent to close at 948 pence on the back of strong subscriber numbers. But the rally was capped by news that telecom regulator Oftel is investigating pricing practices. Vodafone (VOD) rose 2.24 percent to 1,272 pence.
The spotlight in Paris was on the banking sector after BNP (PBNP) upgraded the terms of its takeover offers for rivals Société Générale (PGLE) and Paribas (PPM) early Thursday to $41 billion.
All three stocks were suspended temporarily. When trading resumed they diverged. Disappointment over the extra cost of the deal knocked 1.73 percent off BNP's stock price. SocGen and Paribas ended up 2.63 percent and 3.04 percent, respectively.
Export-earners also were in vogue, thanks to the fast-falling single European currency making overseas sales cheaper. Defense groups Lagardère (PMMB) and Thomson-CSF (PHO), which price their products in dollars, were among the leading gainers. The latter jumped 6 percent.
Frankfurt's financial and insurance stocks led the way on the blue chip Dax. Deutsche Bank (FDBK) climbed 3 while Allianz added about 6 percent.
Automakers, which generate a significant proportion of their revenues overseas, also were strong in Frankfurt. DaimlerChrysler advanced 3 percent on speculation of a ratings upgrade, while BMW (FBMW) and Volkswagen (FVOW) also advanced.
In Zurich, UBS added 12 Swiss francs to 476 while CS Group tacked on 12.5 francs to 281.50. 
-- from staff and wire reports
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