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Paris powers to record
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December 22, 1999: 1:06 p.m. ET
Surging techs, telecoms push Frankfurt, Paris to new highs; London holds gains
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LONDON (CNNfn) - Christmas came early to Frankfurt, Paris and Amsterdam Wednesday as sizzling technology and telecom stocks drove blue chip indexes to record heights.
But anemic trading volume prevented London from setting its own record, though the FTSE 100 clung to small gains, while Swiss shares ended flat.
A pre-holiday exodus of portfolio managers from the market also led to exaggerated movements. The mood was leavened across the region by the U.S. Federal Reserve's decision Tuesday to retain a neutral bias toward future rate moves while holding current rates steady. Tech stocks forged ahead following Tuesday's nearly 3.5 percent rally on the U.S. tech-laden Nasdaq composite index.
London's benchmark FTSE 100 finished 21.1 points higher at 6,728.6, a gain of 0.3 percent, its advance undercut by a steep drop in trading volume as fund managers closed their books for the year-end holidays. Leading technology issues contributed what little upside there was in the market as gainers edged out decliners by a three-to-two margin.
Paris' CAC 40 pierced the 5,600 barrier to end up 1.66 percent at 5,621.29, its 35th record close this year. Gains outnumbered declines 27 to 13. A sharp surge in telecom group Bouygues helped power the rally. The index pared some of its early gains after the U.S. Nasdaq succumbed to profit taking after an initial spike.
In Frankfurt, the electronically traded Xetra Dax ended up 1.15 percent at 6,492.53, well off its intrasession peaks above 6,530 points. Deutsche Telekom led the index higher amid mounting speculation it’s poised to acquire France's Bouygues. Zurich's SMI finished flat at 7,300.9, held in check by modest declines in heavyweights Novartis and Nestle.
The FTSE Eurotop 300, a pan-European index that offers a useful gauge of the overall regional mood, closed up 0.67 percent at 1,514.53.
In currency markets. The yen climbed to near four-year highs against the dollar, falling as low as 101.44 yen, amid hopes for an influx of global cash in the Japanese economy. The yen also approached new peaks against the euro, which slid to 102.23 yen.
In Paris, bold advances in a handful of high-tech issues dominated the record rally. Leading the blue chip gainers, pay-TV operator Canal Plus (PAN) finished 10.24 percent higher, though off an earlier record of 114.5 euros. The spurt was linked to speculation that Vivendi (PEX) may sell its 9 percent stake in the company to Spanish phone carrier Telefonica. The latter maintained it was not aware of any deal. Vivendi shares gained 3.54 percent.
Bouygues (PEN), the French construction and telecom conglomerate, built on Wednesday's hefty gains, sprinting ahead 7.3 percent amid talk of a possible bid for its telecom arm from Deutsche Telekom (FDTE), whose own shares advanced 7.6 percent. Separately, Groupe Arnault said Wednesday it had increased its stake in Bouygues to 10.4 percent from 6.3 percent.
Telecom network provider Equant (PEQU) rose nearly 10 percent, closing just below a new intraday record of 11 euros, at 105 euros. Computer consultant Cap Gemini (PCAP) jumped 6.63 percent, while France Telecom (PFTE) leapt 3.85 percent. Retail conglomerate Pinault-Printemps Redoute (PPR) spiked 7.3 percent.
Technology shares also stole the thunder from other sectors in London, where telecom equipment group Marconi (MNI) advanced 6 percent, contributing 8 points of upward thrust to the FTSE 100 index. Software developer Sage Group (SGE) rocketed 11.3 percent, adding five points to the overall blue chip advance.
Logica (LOG) gained 3.2 percent. Electrical-goods retailer Dixons (DXNS) added 4.54 percent. On the downside, financial media group Reuters (RTR) gave up an early advance, to close down 2.27 percent.
Also crimping the FTSE 100’s advance, oil producer Shell (SHEL) fell 0.98 percent while BP Amoco dipped 1.9 percent despite reports it is close to a compromise deal with Russia's Tyumen Oil on a face-saving plan to jointly develop a massive Siberian oil field.
The Dax moved into record territory, helped by Deutsche Telekom’s performance and firm gains by auto stocks after recent poor performances. DaimlerChrysler (FDCX) added 0.9 percent and Volkswagen (FVOW) closed up 1.1 percent.
Among smaller European markets, Amsterdam also stood out, with a 1.56 percent advance.
In Milan, four telecom firms that collectively account for more than 30 percent of the blue chip index capitalization posted strong gains. Shares of former phone monopoly Telecom Italia advanced 5.7 percent after the company's chief executive, Roberto Colaninno, said he expects to float TI's Internet business in the first half of 2000. Telecom Italia Mobile, or TIM, gained 4.88 percent while, Olivetti climbed 4.21 percent and Tecnost vaulted 5.18 percent. The Milan MIB 30 index added 2.8 percent to 40,814. 
-- from staff and wire reports
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