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Europe rebounds at close
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January 7, 2000: 12:31 p.m. ET
Bourses close with gains after 8 percent decline for week
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LONDON (CNNfn) - European equities posted firm gains Friday after a volatile week which had seen the major markets slide 8 percent from record highs set last week.
Interest rate fears, which had clouded the markets all week, lifted a little as investors bought into defensive plays after exiting telecom and technology shares.
The FTSE 100 benchmark index in London closed up 58 points, or 0.9 percent, at 6,504.80. However, the index lost 6.1 percent during a shortened four-session trading week.
Frankfurt's electronically traded Xetra Dax ended 4.7 percent higher at 6,780.96 as investors bought heavily into telecom and financial stocks. The performance helped limit the market's loss since Dec. 30 to 2.5 percent.
In Paris, the blue chip CAC 40 moved 1.6 percent ahead to 5,539.61 but still slid 7 percent during the week, the worst performer among the major markets. Zurich's SMI ended 2.3 percent higher Friday at 7,448.0 to post a 1.6 percent decline for the week.
The FTSE Eurotop 300, a pan-European stock index that offers an indication of the overall regional mood, was up 2.1 percent at 1,503.35. Its computer-industry segment soared almost 9 percent while stocks such as beverages and food also made strong gains.
Markets were helped by early gains on Wall Street despite a larger-than-expected rise in employment and wage growth in December. The Dow Jones industrial average was trading 1.3 percent higher at the close of business in Europe while the Nasdaq was advancing 2 percent. The U.S. gains knocked back the euro, taking the single currency around 30 cents lower to $1.0290.
SAP lifts Frankfurt
After the rout of technology stocks earlier this week, German software maker SAP [FSE:FSAP3] was the standout performer in Europe, surging 18.5 percent to a 17-month high of 640 euros after reporting that pretax profit rose significantly in the fourth quarter of 1999, and maintained its estimate that full-year sales grew by 15 to 20 percent.
The news gave a lift to a German market, which had suffered the worst declines among the major bourses over the previous four sessions.
Telecom shares rebounded, with Mannesmann (FMMW) shares closing up 7.1 percent after reporting a 37 percent increase in underlying profit for 1999. Deutsche Telekom (FDTE), the most heavily weighted stock on the Dax, recovered from its recent slide to end 6.1 percent ahead.
Deutsche Bank (FDBK) continued to benefit from a plan to restructure its retail business, up 3 percent, while other financial shares rose after the publication of new tax plans which could allow them to offload billions of dollars in assets. Dresdner Bank (FDRB) climbed 5.8 percent while its mooted merger partner HypoVereinsbank added 3.2 percent. Insurer Munich Re surged 4.5 percent.
DaimlerChrysler (FDCX) added 2.3 percent and other cyclicals enjoyed firm demand as well, with chemical makers Bayer (FBAY) and BASF (FBAS) both gained 4.2 percent respectively. Retailer Karstadt Quelle (FKAR) gained almost 12 percent.
Defensives boost London
London was led higher by defensive stocks, with business-services provider Rentokil Initial (RTO) leading the gainers with a 9.1 percent gain while consumer goods maker Reckitt Benckiser (RB) advanced 6.6 percent.
Gains outnumbered declines by 3 to 2 in relatively heavy trading of 1.6 billion shares.
Liquor maker Allied Domecq (ALLD) gained 3.9 percent and retailer GUS (GUS) was 6.3 percent higher as investors continued to buy into cyclicals, switching out of telecom and technology shares.
The latter were mixed, with chip designer Arm Holdings (ARM) soaring 6.5 percent after being down in morning trade.
Computer-software developer Misys (MSY) was the weakest stock on the benchmark index, down 6.1 percent while computer-services provider Sema (SEM) lost 3 percent.
Marconi (MNI) fell 1.7 percent after sector rival Lucent Technologies (LU) issued a profit warning late Thursday. However, telecom-equipment provider. Alcatel (PCGE) also suffered a hangover, but recovered to close 2.1 percent ahead in Paris.
Among the market heavyweights, British Telecommunications (BT-A) slipped 1.5 percent while BP Amoco (BPA) fell 1.2 percent and oil firm Shell (SHEL), the FTSE's third-largest stock, soared 4.4 percent.
Television broadcaster Carlton Communications (CCM) ended flat after shedding early gains. The media and leisure company Granada Group (GAA) asked for regulatory permission to launch a bid for both Carlton and United News & Media (UNWS). United lost early gains to trade down 1 percent while Granada gained 1 percent.
In Paris, computer-services provider Cap Gemini (PCAP) benefited from SAP’s strong performance to lead the CAC with a 5.7 percent advance. France Telecom (PFTE) climbed almost 4 percent to further buoy the market and defense firm Thomson-CSF (PTHO) climbed 5.6 percent on the move into defensives. Retailer Carrefour (PCA) recovered from recent losses to add 3.7 percent. Network provider Equant (PEQU) lost 2.5 percent to head the declines. The stock soared in December.
Drug firm Roche Holding was the leading performer in Zurich, gaining 5.7 percent after DLJ raised its recommendation on the stock. Swissair parent SAir Group rose 4.5 percent. 
--from staff and wire reports
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