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Bourses hold on to gains
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July 14, 1999: 12:50 p.m. ET
Europeans stave off Wall St. retreat after U.S. traders shake off benign data
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LONDON (CNNfn) - Europe's main markets finished Wednesday with only modest gains after failing to maintain the momentum provided by key U.S. inflation data, which showed a surprise drop last month.
Bourses just managed to resist late selling pressure as sentiment on Wall Street soured, after U.S. investors recorded an initial muted welcome to the news that the core U.S. producer price index dipped 0.1 percent in June. Economists had predicted a small rise.
The benign implications for U.S. interest rates cut little ice with investors on either side of the Atlantic. London's FTSE 100 closed up 27.5 points, or 0.43 percent, at 6,473.1, after the index started tracking the Dow Jones industrial average downward in late trading. U.S. blue chips were 38 points lower as London closed.
U.K. stocks got a lift earlier from domestic data, which showed a drop in the unemployment rate to a 19-year low in June of 4.4 percent.
Germany's Xetra Dax put in a slightly stronger performance to finish just over 37 points higher at 5,610.89, a gain of 0.67 percent, buoyed mainly by financial stocks reacting to rumors of a deal between two of the country's largest banks.
Zurich's SMI closed well short of its session high to end just 27.9 points higher at 7,093.9, a rise of 0.39 percent.
Paris was closed for the Bastille Day public holiday.
The neutral outlook for U.S. interest rates did help the euro, however, which earlier had endured choppy trading, after comments by a German government adviser made an early dent. The currency recovered and in late European trading stood around the $1.0218 mark, well off its session low of $1.0126.
London's gainers were led by electronics retailer Dixons (DNS), which soared over 5.8 percent as the market continued to digest the implications of its planned offering of shares in its Internet service provider Freeserve, the U.K.'s largest.
Many of the U.K.'s banking stocks also had a strong session, as investors were spurred to look around for takeover candidates on speculation of a mega-banking merger in Germany.
Barclays (BARC) was up over 2.9 percent, Natwest Bank (NWB) jumped over 3 percent, while Woolwich (WWH) surged over 5.3 percent and Abbey National (ANL) put on almost 3.5 percent.
BP Amoco (BPA) rose 1.6 percent following a presentation to analysts on progress in integrating the Amoco business. In contrast, rival Shell (SHEL) ended down 0.76 percent. This despite the fact that benchmark Brent crude continued to hold its own above $19 per barrel, although it fell some 35 cents from its session high of 419.43.
In the leisure sector, Hilton Group (HG) ended just under 2 percent higher, having jumped almost 3 percent earlier in the session amid reports that it may be the subject of a bid from its U.S. namesake Hilton Hotels Corp. (HLT). The U.K. hotel group owns the rights to the Hilton name outside the United States.
Media stocks had mixed fortunes. Publisher Emap (EMA) ended almost 4 percent higher after a re-rating. But media group Carlton Communications (CCM) slid almost 3 percent after On Digital, the British digital pay-TV company in which it has a 50 percent stake, lost its chief executive. Granada (GAA), which owns the balance, advanced almost 2 percent after its stock slumped over 4 percent Tuesday.
Cable & Wireless (CW.) tumbled over 4.3 percent after Mannesmann (FMMW) dropped out of the bidding for the U.K. company's One2One cellular joint venture. Mannesmann shares closed 2.5 percent higher in Frankfurt.
In the airline sector, British Airways (BAY) pared some losses to close down 2 percent after being fined by the European Commission for breaching competition rules in setting rewards for travel agents.
Frankfurt was lifted by the re-emergence of dated rumors linking Dresdner Bank (FDBK) with HypoVereinsbank. The former's stock closed 3.6 percent higher while the latter jumped just under 3.5 percent. The rumors also lifted Commerzbank (FCB), which jumped 5.2 percent, after recent weakness.
Siemens (FSIE) jumped almost 3.7 percent after the company was reported as saying that it aims to triple its mobile phone sales to 11 million units this year.
Chemical group BASF (FBAS) climbed 1 percent after announcing a joint venture with Shell (SHEL) and TotalFina (PFP) to build the world's largest butadiene extraction plant.
-- from staff and wire reports
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