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Europe lower at midday
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November 2, 1999: 7:52 a.m. ET
Investors remain on rate watch ahead of Thursday meetings; CAC hit by resignation
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LONDON (CNNfn) - Europe's major stock markets fell as investors remained on interest-rate watch Tuesday, though they moved off their lowest levels of the session.
London's FTSE 100 lost 33 points or 0.5 percent to 6,250.90 at mid-session. Traders have one eye on the Bank of England's policy-makers' meeting Thursday. Survey evidence that house prices continue to surge - a sign of a pickup in inflation - boosted investors' expectations that the central bank would raise rates in a bid to slow growth and curb inflation.
In Frankfurt, the Xetra Dax slid 0.4 percent to 5,504.16, with auto stocks pulling the market lower.
The CAC 40 in Paris was the weakest of the major markets, falling after the resignation of finance minister Dominique Strauss-Kahn. The index was off 0.7 percent at 4,856.27.
In Zurich, the SMI Swiss blue chip index shed 13 points to 7,144.1.
The FTSE Eurotop 300, a broad measure of the largest pan-European stocks, lost 0.4 percent as strength in leisure stocks was more than offset by weakness in auto shares.
Strauss-Kahn's departure initially drove the euro below $1.05 before the single currency recovered to around $1.0516.
Wall Street looked set for a small rise later Tuesday, with S&P 500 futures quoted 1.7 points higher on the Globex trading system at 1,364.20. London brokers estimate fair value, which takes into account the variable effect of dividend payments and interest costs, at 1,362.31.
London was evenly split between gainers and losers, with the former led by a 4 percent rise in engineering group GKN (GKN) after an upgrade.
Media and leisure group Granada (GAA) gained 3.7 percent, but most other advances were more modest.
Oil giant BP Amoco (BPA) fell 0.9 percent amid reports that its proposed $27 billion takeover of Atlantic Richfield (ARC) could be blocked by U.S. antitrust regulators because of concerns over the combined entity's dominance in Alaska.
Telecom heavyweight Vodafone AirTouch (VOD) lost 2.4 percent after a 6 percent advance Monday.
Struggling retailer Marks & Spencer (MKS) bounced back to trade up 1.1 percent it reported a 43 percent fall in first-half pre-tax profits, in line with expectations.
Bank shares were under pressure as interest rate worries came into focus, with HSBC (HSBA) and Barclays (BARC) both losing 1.2 percent. Insurer Norwich Union (NU) posted the largest decline, off 3.8 percent, while Woolwich (WWH) lost 2.8 percent as hopes faded of a merger with Alliance & Leicester (AL).
In Frankfurt, Volkswagen (FVOW) was the main focus as its shares slumped 5.3 percent. Investors bailed out after the auto giant reported a 2.2 percent fall in nine-month pretax profits to 3.3 billion marks ($1.8 billion) and warned it would not meet its full-year 1998 earnings.
The sentiment spread to other auto shares, with DaimnlerChrysler (FDCX) down 1.8 percent.
Metro (FMEO), Europe's largest retailer, led the gainers with a 3 percent advance. Specialty chemicals maker Degussa-Huels (FDGH) added 1.8 percent after recent strong interim earnings
Most other stocks were narrowly down, with Deutsche Bank (FDBK) off 1.2 percent and utility Viag (FVIA) shedding 2.4 percent.
In Paris, chip maker STMicroelectronics (PSGS) surged 7.1 percent in the wake of the Nasdaq's performance. The second earthquake in Taiwan in six weeks also raised the prospect that that country's semiconductor production could be affected.
Building materials group Lafarge (PLG) jumped 4.8 percent as investors bet on a new round of consolidation in the sector.
Canal Plus (PCAN) was the largest decliner as the pay-TV operator lost 2.4 percent.
In Zurich, Swisscom was the biggest loser as its shares fell 1.7 percent after Switzerland's biggest telecommunications company said it was cutting some user fees by 12 percent.
In Milan, the utility Enel jumped 2.3 percent before slipping back a bit following the world's largest initial public offering. Shares are due to start trading in New York later Tuesday. 
-- from staff and wire reports
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