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Europe closes mixed
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January 20, 2000: 1:16 p.m. ET
London toppled by fears of tighter credit; techs boost Paris and Frankfurt
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LONDON (CNNfn) - London's leading stock index finished lower for the third straight session Thursday as interest rate anxiety gnawed at investors, lopping value off several bellwether banking stocks.
Paris and Frankfurt ended higher, however, boosted by gains in technology and retail stocks. Zurich gave up more than 1 percent.
Markets barely reacted to a widely expected European Central Bank decision, shortly after mid-session, to hold its short-term lending rate steady at 3 percent.
But stronger-than-expected British producer price figures, along with a third straight monthly jump in Germany's Ifo business climate index in December, contributed to a growing conviction that central bankers -- from London to Frankfurt to Washington - - will opt for more credit tightening in the near future.
London's benchmark FTSE-100 ended down 96.7 points, or 1.5 percent, at 6,348.7, pulled lower by losses in banking shares. Investors fear banks' profits will suffer if the Bank of England makes credit more costly to obtain when its policymakers meet early next month.
A surge in media conglomerates Lagardere (PMMB) and Canal Plus (PAN) underpinned a broader rally on the blue chip CAC 40, which ended up 60.28 points, or 1.1 percent, at 5,709.74.
Canal Plus spiked 12.5 percent while Lagardere soared 13.1 percent, buoyed by plans for a new digital television alliance and Lagardere's earlier announcement that it's selling part of its Club Internet online unit.
The electronically traded Xetra Dax in Frankfurt finished 0.3 percent higher at 7,112.66, helped by sharp gains in a red-hot retailer, while the SMI in Zurich slid 1.2 percent to end at 7,251.2.
Wall Street was seen adding to the weakness in Europe after the Dow Jones industrial average turned lower after relinquishing an early gain of almost 70 points.
The euro edged above the $1.01 level in late trade, wrenching itself free of the sub-$1.01 rut in which it had been mired for a while after a record U.S. trade deficit in November had little immediate impact on the dollar.
Metro jumps on news report
Exemplifying the tech sector's good fortune Thursday, Dutch chipmaker ASM Lithography rocketed 13.8 percent to a record close of 139.5 euros in Amsterdam after posting a better-than-expected 30 percent jump in 1999 net profit. The company, which also plans to propose a three-for-one stock split, said it expects rapid growth to continue this year.
Retailers also were in the spotlight amid continuing speculation of more sector consolidation in the offing. Leading European retailer Metro (FMEO) closed up 7.9 percent, off an earlier surge of more than 14 percent, after speculation about a possible sale of the company to U.S. retail juggernaut Wal-Mart drew a denial from the German company's supervisory board. Germany's Manager magazine had reported Thursday that three shareholders who collectively control 60 percent of Metro were considering a deal with the U.S. retail giant.
Other major retailers seen as possible consolidation targets posted mixed performances, with Britain's Kingfisher (KGF) gaining1.2 percent, Marks & Spencer (MKS) advancing 0.4 percent, Tesco (TSCO) slipping 1 percent, and France's Carrefour (PCA) edging 1.2 percent higher. French retailer Casino gained 3 percent.
Among larger constituents, BP Amoco (BP-A) shed 3.3 percent, British Telecommunications (BT-A) gave up 2.6 percent, and drug maker Glaxo Wellcome (GLXO) slid 2.3 percent, and its merger partner, SmithKline Beecham (SB), fell 0.8 percent. Among banks, HSBC Holdings (HSBA) reeled 4.1 percent, while Barclays (BARC) skidded 3.3 percent, Abbey National (ANL) lost 4 percent and Standard Chartered (STAN) was down 6 percent.
British arms maker BAE Systems (BA) jumped 6.8 percent despite dismissing a published report that it had secured a U.K. air-to-air missile contract along with other European partners.
The long-running takeover bid by Vodafone AirTouch (VOD) for rival telephone operator Mannesmann intensified amid reports that the U.K. firm may sweeten its hostile bid in exchange for the German company's agreement to a deal. Vodafone shares ended up 0.8 percent while Mannesmann (FMMN) gained 3 percent. Equity traders reportedly were taking money out of the market to shift into Vodafone amid hopes of a re-rating for the British firm if it prevails in its takeover bid.
In Frankfurt, technology shares pushed the market higher, with information and technology group Siemens (FSIE) gaining 5.3 percent, while software publisher SAP [FSE:FSAP3] advanced 2.4 percent.
Telecom operator Deutsche Telekom (FDTE) ended down half a percent after announcing a 45 percent fall in 1999 net profit, attributing the drop to the cost of acquisitions, reduced tariffs and increased competition.
In Paris, telecom equipment maker Alcatel (PCGE) rose 1.7 percent and chip maker STMicroelectronics (PSTM) advanced 6.7 percent after saying 1999 net profit rose by a third, and predicting the semiconductor market will grow 25 percent in 2000 to $185 billion.
France Telecom (PFTE) gained 4 percent and TotalFina (PEQ) was lifted 1.8 percent as oil prices hovered just below $30 a barrel in New York. 
-- from staff and wire reports
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