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Bourses finish mixed
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September 10, 1999: 1:02 p.m. ET
London dips late on amid further rate jitters, Paris hits another record high
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LONDON (CNNfn) - European markets ended Friday mixed after an initial boost from weak core U.S. inflation data dissipated in late trade, leaving London in the red.
London's benchmark FTSE 100 closed firmly in the minus column, ending 1.1 percent lower at 6,191.0, a fall of 70 points. The downbeat ending reflected a poor week for the index, which has lost 2.2 percent over the past five trading days.
U.K. blue chips were hit late on by further concerns about future U.K. interest rate hikes, after trading up some 40 points higher following the release of the weaker-than-expected core U.S. producer price data. The Bank of England surprise move to hike interest rates by a quarter of a percentage point Wednesday still was haunting the markets.
French and German blue chips finished on a positive note on the back of the weaker U.S. data. The core PPI index for August -- which excludes the volatile food and energy sector -- came in 0.1 percent lower, versus market forecasts for a 0.1 percent rise. But the overall index rose 0.5 percent, slightly ahead of forecasts.
The CAC 40 in Paris managed its second consecutive record close Friday, as it posted a gain of 0.6 percent, or 28 points, to end at 4,745.48. French blue chips gained 1.6 percent over the week. Investors were buying in anticipation of further strong earnings reports next week.
The Xetra Dax in Frankfurt was the best performer of the session, as it gained 0.9 percent to close at 5,483.95, a jump of 47 points. German blue chips have enjoyed some strong buying over the past five trading days, posting gains of 2.8 percent over the week.
The SMI in Zurich, in contrast, closed 22 points lower at 7,171.9, a fall of 0.3 percent. The market was undermined by weak financial stocks and ended up just 34 points on the week.
Oil stocks across Europe basked in the glow of continued strong crude prices. Brent crude touched a new high of $23.08 Friday, leaving it almost 10 percent higher on a week ago..
The strength of oil stocks was reflected in the FTSE Eurotop 300, a broad measure of pan-European blue chips. The sector was up 1.9 percent, behind forestry and paper stocks, which led the index with a 4.6 percent increase, and the computer sector, which jumped 2.7 percent.
Overall the Eurotop 300 reflected the mixed session in Europe to close just 0.2 percent higher at 1,336.19.
In London, BP Amoco (BPA) bucked the losing trend, to close 1.6 percent higher, while Shell (SHEL) managed to hold on to gains of 0.2 percent.
Most other stocks were caught up in an index-wide sell-off, which left 82 of the 100 constituents in the red, led by the interest rate-sensitive financials.
One of the biggest losses among banks came from Royal Bank of Scotland (RBOS), which fell 4.3 percent. Heavyweight Lloyds TSB (LLOY) lost 2.7 percent.
Highly rated telecom stocks also suffered. The two heavyweights of that sector led the way down. British Telecommunications (BT.A) fell 2.3 percent, while Vodafone AirTouch (VOD) tumbled 2.8 percent.
PowerGen (PWG) slumped 4.6 percent after the chief executive of the generator said it has a war chest of up to $5 billion to spend on U.S. acquisitions.
The biggest decliner in the FTSE 100 was building materials group Hanson (HNS), which lost almost 5 percent.
In Paris, Elf Aquitaine (PAQ) and TotalFina (PFP) received an additional boost, on top of the oil price, from press reports of a three-way alliance with Italian energy group ENI, which ENI denied.
Elf closed 2.7 percent higher, while TotalFina rose 2.4 percent.
Chipmaker STMicroelectronics (PSGS), was the strongest gainer, up 3.2 percent. Banking group BNP (PBNP) climbed 3 percent, as speculation about pan-European consolidation in the sector continued to swirl.
Tire maker Michelin (PML) fell 2.8 percent after strong gains in the previous session.
In Frankfurt, drugs and chemicals group Hoechst (FHOE) was the biggest winner after the company announced the size of the dividend it plans to pay before it merges its life sciences business with those of Rhone-Poulenc (PRPP) of France.
German airline Lufthansa (FLHA) was another big gainer, as it closed 2.5 percent higher.
Utility group Viag (FVIA) rose 3.1 percent on a report that its potential merger partner, Veba (FVEB), had offered to buy the state of Bavaria's 25 percent stake in the firm for 10 percent above the market price. Veba fell almost 2 percent.
In Zurich, the world's largest inspection group, SGS, closed down 1.1 percent at 1,649 Swiss francs despite posting a four-fold rise in first-half net profits to 43 million Swiss francs ($28.4 million), in line with expectations.
Zurich Allied, was the leading decliner, as it fell 2.1 percent, with one trader blaming the fall on its London-based sister company Allied Zurich (ADZ) losing its place in a key European blue chips index. Allied shares fell 3.4 percent in London.
The euro suffered Friday as it hit a seven week low against the dollar at $1.0390, and also hit a life-time low against the yen. The single currency fell below 113.25 yen in U.S. trade.
-- from staff and wire reports
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