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Frankfurt leads bourses
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February 10, 2000: 12:22 p.m. ET
Financial stocks provide focus as investors shed media, telecom shares
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LONDON (CNNfn) - European stock markets ended in mixed form Thursday after a choppy session marked by sharp falls in high-flying media and telecom firms, with the banking sector providing the main corporate-news focus.
Frankfurt reversed course at midday to forge ahead to a new record close, though London and Paris failed to recover from a sluggish start influenced by the sharp falls on Wall Street Wednesday.
In London, the FTSE 100 index closed down 36 points, or 0.56 percent, at 6,279.80, having fallen below 6,200 at one point. Markets shrugged off the widely flagged quarter percentage point rise in U.K. interest rates by the Bank of England and recovered most of their losses as gains in financial, drug and oil stocks reflected a switch from media shares.
In Frankfurt, the Xetra Dax moved back into the black, closing up 1.05 percent at a record 7,709.27, helped by speculation of a tie-up in the financial sector. The CAC 40 in Paris ended 1 percent lower at 6,207.52 as investors pulled back from its Net-related components after their strong recent gains.
Most smaller markets remained lower, with the AEX in Amsterdam ending down 0.9 percent and the SMI in Zurich off 0.5 percent. The Mib-30 in Milan bucked the trend, up 1.5 percent on strong buying of financial stocks.
The Dow Jones industrial average was flat at the close of business in Europe.
The pan-European FTSE Eurotop 300, a broader index of the largest European stocks, closed 0.33 percent lower at 1,561.70. Telecom and computer stocks lost ground, while leisure, financial and tobacco constituents made modest gains.
In currency markets, the euro ended flat at around 98.65 cents, having gained a cent at one point but failing to break through resistance to its move toward parity, peaking at 99.58 cents during the session. The pound was almost unchanged at $1.6090.
In London, the four-month battle for control of National Westminster Bank (NWB) appeared closer to resolution, with Royal Bank of Scotland (RBOS) moving ahead after rival bidder Bank of Scotland (BSCT) appeared to concede defeat. NatWest shares ended flat at 1,152 pence, reversing an early gain, BoS stock closed 1 percent ahead and RBS lost 3.2 percent to finish at 870 pence, having been 9 percent down at one point in the session.
Lloyds-TSB [LSE::LOY], the largest U.K. clearing bank, benefited from the shift out of NatWest and RBS shares, closing 6.1 percent higher. Lloyds is seen as a potential bidder for BoS. Barclays (BARC) rose 5.6 percent after hitting a 12-month low Monday.
Sharp gains in Britain's two largest oil companies helped add 38 points to the FTSE to limit the overall loss. Shell (SHEL) led the index gainers with a rise of 8.2 percent after posting earnings at the top end of forecasts and saying it is maintaining its annual cost-saving target of $4 billion by 2001. Rival BP Amoco (BPA) ended 4.6 percent higher as oil prices hit a nine-year high.
In the telecom sector, Cable & Wireless (CW-) was the weakest performer, off 5.9 percent amid speculation there could be problems in alliance talks between its Hong Kong subsidiary and Singapore Telecom. British Telecommunications (BT-A) lost 4.5 percent
Vodafone AirTouch (VOD), the FTSE's second-largest component, ended up 1.7 percent, reversing an early 4 percent fall as its recommended takeover offer for Mannesmann (FMMN) became unconditional. The German firm's stock gained 8.1 percent in Frankfurt.
Retailer Marks & Spencer (MKS) lost 7.2 percent after entrepreneur Philip Green, who has been stalking the troubled company, said he would not make a bid.
While the rise in U.K. rates had been widely flagged, investors remained nervous ahead of the announcement, with even high-flying tech stocks caught up in the selling. Computer services provider Logica (LOG) was down 8.8 percent, though the stock has doubled since the start of the year. Business software publisher Sage (SGE) slid 4.4 percent.
Media companies Pearson (PSON) and Daily Mail & General Trust (DMGO) each lost more than 5 percent, having climbed sharply in recent sessions after announcing investment plans for their Internet activities. Granada Group (GAA) was the best-placed media stock, up 7.2 percent after a "buy" recommendation from Deutsche Bank.
Overall, declines outnumbered gainers by two to one in relatively light volume of 722 million shares.
In Frankfurt, Commerzbank (FCCB) was the star performer as the country's fourth-largest quoted bank jumped 10.2 percent on speculation that Dutch bank ABN-Amro may be poised to make a takeover bid. Commerzbank has consistently stated its intention to remain independent. Both banks declined to comment.
Shares in HypoVereinsbank (FHVM) and Dresdner Bank (FDRB), Germany's number two and three, both gained more than 2 percent.
Metro (FMEO) rose 3.5 percent after reporting a 19 percent rise in full-year earnings for 199.
However, the Dax's most buoyant stocks in recent sessions all fell back. Deutsche Telekom (FDTE) shed 2.6 percent, software publisher SAP [FSE:FSAP3] lost 4 percent and engineering and technology leader Siemens (FSIE) was the Dax's worst performer, closing down 6.1 percent.
In Paris, luxury goods maker LVMH (PMC) gave up 8.8 percent after analysts noted that the euro's recent mild recovery could harm margins from exports. Sector rival Pinault-Printemp Redoubt (PPR) lost 3.8 percent.
However, it was the media and telecoms firms that have profited over the past month from expanding their Internet strategies and were the focus of selling. Lagardère (PMMB), Vivendi (PEX) and Cap Gemini (PCAP) all lost between 3 and 5 percent.
In other sectors, Carrefour (PCA), France's largest retailer, lost 5.8 percent after an earnings downgrade by analysts. Oil producer TotalFina (PFP) lost its gain in the previous session with a 4.2 percent slip.
Hotel operator Accor (PAC) was the best performer, rising 6.5 percent after reiterating its e-commerce strategy. France Telecom (PFTE) also lifted the market with a 1.5 percent advance. 
-- from staff and wire reports
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