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Europe buoyed by pharma
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November 5, 1999: 5:23 a.m. ET
U.S. bid battle boosts U.K., Swiss blue chips; Frankfurt pressured by financials
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LONDON (CNNfn) - Most European markets made tentative gains in morning trade Friday, with drug stocks providing most of the support as they were lifted by the U.S. bid battle in the sector. German blue chips continued their slide into the red.
London's FTSE 100 lost half its opening gains as selling pressures mounted on financial and telecom stocks, off-setting big gains by the pharmaceutical majors. The index stood 21 points higher at 6,352.4.
The drug sector is rife with consolidation rumors after U.S. pharmaceutical giant Pfizer (PFE) launched an $82 billion unsolicited bid Thursday for Warner-Lambert (WLA) in a bid to scupper the latter's agreed merger with American Home Products (AHP).
Zurich's blue-chip SMI index treaded water 40 points higher at 7,341.6, a gain of 0.5 percent, helped by its major drugs heavyweight Novartis.
In Frankfurt, the Xetra Dax fell 19 points, or 0.3 percent, to trade at 5,616.30, while the CAC 40 in Paris lifted back out of the red to trade just 6 points higher at 4,949.42.
The failure of the Dow Jones industrial average to hold on to much of its gains Thursday was expected to weigh on the markets, as European traders digested the strong gains made by bourses in the previous session after a dual rate hike.
U.S. blue chips managed only a modest 30 point gain to close at 10,639.64, while the tech-heavy Nasdaq closed almost 1 percent higher at 3,055.95.
Wall Street looked set for a flat open later Friday with S&P 500 futures quoted almost unchanged on the Globex trading system at 1,368.30. London brokers calculated fair value, which takes into account the effect of dividend payments and interest costs, at 1,369.87.
The mood in Europe was likely to remain muted ahead of key U.S. employment data due out later in the session. A raft of U.K. economic data was also due out during the course of the morning.
The downbeat mood was reflected in the FTSE Eurotop 300, a broader measure of pan-European sentiment, which was flat at 1,362.01.
In the currency markets, the euro was struggling to claw back losses as traders took a negative view on the European Central Bank's rate rise Thursday. The single currency fell below the $1.04 mark to trade around $1.0387.
In London, the SmithKline Beecham (SB-) was the biggest winner as it jumped 6.2 percent, while rival Glaxo Wellcome (GLXO) pared some of its earlier gains to stand 3.8 percent higher.
Software services group Misys (MSY) stood almost 6 percent higher on the back of strong U.S. tech stocks.
Anglo-Dutch consumer products group Unilever (ULVR) slumped almost 7 percent in London, after the company reported a 3 percent fall in third-quarter earnings to  871 million, before one-off items, well short of analysts' expectations.
South African mining giant Anglo American (AAL) was 2.1 percent higher in London after it launched a $2 billion recommended bid for U.K. building materials group Tarmac (TARM) only four days after saying it had broken off talks.
In Frankfurt, the biggest gainer was telecom and engineering group Mannesmann (FMNN), which stood 2 percent higher.
Losses by Deutsche Telekom (FDTE) of almost 2 percent weighed on the market along with weakness among financial stocks. Deutsche Bank (FDBK) fell 1.4 percent.
Swiss drug heavyweight Novartis made strong early gains in Zurich as it led the SMI higher to trade up 1.7 percent at 2,395 Swiss francs.
In Paris, drugs group Sanofi-Syntelabo (PSQ) was up 2.1 percent. Defense electronics group Thomson-CSF (PHO) jumped 3.7 percent after telecommunications group Alcatel (PSGE) said it would buy an additional 9.5 percent stake in the company at 36 per share.
-- from staff and wire reports
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