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Bourses close higher
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August 20, 1999: 1:27 p.m. ET
Major markets finish up more than 1%, prodded by Wall Street
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LONDON (CNNfn) - European stocks closed broadly higher Friday, drawing support from an early upswing on Wall Street and the reweighting of a key European stock index. But bourses posted meager gains for the week as traders toed a cautious line ahead of next week's policy meeting of the U.S. Federal Reserve.
The benchmark gauge in London, the FTSE 100, capped a choppy week on the upside, ending 1.03 percent higher at 6,180.8, prodded by the Dow Jones industrial average, which was up 79 points when London trading ended. Bank and drug stocks led the charge, though volume, at 774 million shares, remained light in lethargic late summer trade. The FTSE blue chips lost 1 percent for the week.
In Frankfurt, the electronic Xetra Dax powered ahead 1.3 percent to 5,254.14, fueled by sharp gains in a pair of heavyweight utilities touted as possible merger partners and a solid performance by banking shares amid news of a megamerger in Japan's financial sector.
Paris's CAC 40 closed up 1.43 percent at 4,472.00 as the late-day run-up on Wall Street lent momentum. Zurich's SMI finished above the psychologically sensitive 7,000 mark for the first time since mid-July, climbing 0.87 percent to 7,051.5.
Oil prices charged to a recent high above $21 a barrel Friday amid continued signs that OPEC is sticking to cutback pledges, raising hopes for more whittling of bloated global stockpiles ahead of OPEC's Sept. 22 ministerial meeting. The euro remained firm against the dollar, trading above $1.06.
Companies joining Dow Jones' influential pan-European Euro Stoxx index underpinned the London gains. HSBC Holdings (HSBA) climbed 2.14 percent to 765 pence, contributing 7 of the 15 points added to the FTSE blue chips by banking stocks Friday. HSBC's advance was driven by strength in Hong Kong, the Stoxx index reweighting, and confirmation of the Japanese bank merger. Barclays (BARC) rose 1.72 percent, Lloyds (LLOY) gained 1.36 percent, and Standard & Chartered (STAN) bolted up 1.66 percent.
Topping the FTSE 100 gainers' list was British Aerospace (BA.), which leapt 6.17 percent to 435 pence after a broker upgraded the stock.
British Telecommunications (BT.A) gained 0.22 percent to 937 pence amid rumors that it will renegotiate the terms of its purchase of Securicor's (SCR) stake in cellular operation BT Cellnet.
But aerospace group Rolls-Royce (RR.) gave up three quarters of a percent after paying $180 million for the compressor unit of U.S.-based Cooper Cameron.
Smiths Industries (SMIN) continued its recent volatile run, finishing down 0.65 percent, having partially recovered from earlier losses of more than 6 percent, following a downgrade from an analyst on the aerospace group.
Pharmaceutical stocks benefited from buying interest in underperforming issues. Glaxo Wellcome added 1.11 percent, while AstraZeneca (AZN) galloped up 3.9 percent.
Frankfurt got a lift from ongoing speculation of a pending marriage in the utilities sector and from improved sentiment in financial stocks after confirmation of the Japanese banking combination and a realignment of companies in the pan-European Euro Stoxx index.
Deutsche Bank (FDTK), which is set to lose its crown as the world's largest bank if the Japanese deal goes through, added 1.84 percent. Dresdner Bank (FDRB) advanced 3.83 percent and HypoVereinsbank climbed 2.4 percent after both firms joined the Euro Stoxx.
The industrial and utility firms Viag (FVIA) and Veba (FVBA), which remain engulfed in merger speculation, rose 4.1 percent and 4.22 percent, respectively.
In Paris, utility group Suez Lyonnais des Eaux (PCY) dived 4.27 to 156.9 euros after confirming the purchase of the stake in Belgian utility Tractebel that it didn't already own. Tractebel soared more than 13 percent to 170.70 euros in Brussels after being suspended Thursday.
Finnish-Swedish forest industry group Stora Enso ended up 5.1 percent at 13.4 euros in Helsinki Friday after unveiling a plan to concentrate on core businesses and sell its power plant operations in Sweden and Finland. The operations are valued at 2 billion euros ($2.11 billion).
In Stockholm, aerospace and defense group SAAB climbed 1.6 percent to 64.50 euros after reporting a 60 percent jump in its first-half operating profit and forecasting firmer earnings for the full year than in 1998.
In Amsterdam, ABN Amro finished up 1.38 percent at 22.00 euros after denying it had any near-term plans to seek outright control of Italy's Banca di Roma, in which the Dutch bank currently holds an 8.75 percent stake. Italy's financial market watchdog launched a probe Friday after comments Thursday by ABN's chairman resulted in a nearly 10 percent surge in Banca di Roma stock in Milan.
-- from staff and wire reports
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