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Europe ends in mixed mood
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December 28, 1999: 1:07 p.m. ET
Frankfurt scrapes its way to another record; Paris dips; euro slips below $1.01
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LONDON (CNNfn) - German and Italian stock indexes finished in record high territory Tuesday, with Frankfurt’s Xetra Dax rallying from an earlier decline to post its tenth consecutive all-time mark.
Shares in Zurich edged higher, while Paris stocks closed marginally lower. Price movements were exaggerated, however, as the region's biggest market - London -- remained closed for a public holiday.
Frankfurt's electronically traded Xetra Dax finished up 0.4 percent at 6,861.54. The index was lower most of the day, weighted by a slump in financial issues that reflected doubts about a German tax reform proposal. But an end-of-the-day rally pushed the index into the black by the close.
Milan's MIB 30 gauge rallied 1.3 percent to a record close at 42,906 in a rally led by technology buying. Zurich's SMI got a boost from a handful of buoyant blue chips to end up 33.9 points at 7,447.2.
In Paris, the CAC 40 finished down 0.1 percent at 5,827.08. Volume was a paltry 1.3 billion euros, less than half of the average daily volume in November.
The single currency, the euro, dipped below $1.01 amid anemic trading volumes, though traders said strong euro-zone fundamentals seemed to be supporting the currency.
European government bond prices fell amid low volumes, little fazed by euro-zone money supply data showing 6.2 percent annual growth in November, in line with expectations.
After idling most of the session in the red, Frankfurt drew support from Wall Street and a hefty gain in heavyweight carmaker DaimlerChrysler (FDCX), which closed up 2.18 percent after posting a 12 percent rise in its preliminary full-year sales and issuing a bright outlook for 2000.
Those two factors helped to offset the downside from German financial stocks. That sector could take a hit if tax reforms are ultimately jettisoned due to political pressure. The reform would allow the sector to initiate heavy unloading of cross-shareholdings without fear of prohibitive taxation that has so far hindered massive restructuring in Germany.
In addition, traders warned that the benefits of capital gains tax proposals may have been over-stated. Deutsche Bank (FDBK) fell 0.86 after skyrocketing nearly 23 percent over the past two sessions on the back of the tax-reform proposal. Allianz (FALV), the insurer, slipped 1.55 percent, also backtracking from recent heavy gains.
On the upside, retailer Karstadt Quelle (FKAR) climbed almost 4 percent, while software giant SAP (FSAP) added 1.4 percent.
In Paris, Crédit Lyonnais (PCL), which had climbed Monday on takeover speculation, tumbled 6.2 percent as the stock succumbed to profit-taking. TotalFina (PFP) reversed early losses to end up 0.4 percent even as its image took a battering in the aftermath of this month’s oil spill by one of its tankers off the French coast.
Auto shares moved ahead, led by a 1.8 percent gain in Renault (PRNO) shares. Peugeot (PUG) added 0.6 percent and Michelin (PML) advanced nearly 1 percent.
Off the CAC 40, Air France leapt 5.87 percent, lifted by an appreciation in its 25-percent shareholding in travel reservation company Amadeus, which recently made its market debut.
Equant (PEQU), a data communications provider which lost ground Monday, reversed early gains to fall 3 percent. Hotel operator Accor (PAC) rose 2.27 percent. But telecom-to-construction conglomerate Bouygues (PEN) shed 5.9 percent as profit takers descended.
France Telecom (PFTE) closed up 0.4 percent at 126.3 euros, off its earlier record of 129.2 euros achieved before the French telecom regulator ordered the company to obey rules governing a new technology or face sanctions. Deutsche Telekom (FDTE) shed 3.2 percent, matched in the minus column by Dutch telecom firm KPN.
Telecom and technology shares continued to dominate the Milan market. Seat PG closed up 1.46 percent following a friendly bid Monday for retailer Buffetti, which saw its shares climbed 4.25 percent. Telecom Italia rose 1.42 percent, while Olivetti gave up 0.9 percent. 
-- from staff and wire reports
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