LONDON (CNNfn) - Europe's leading equity markets ended slightly lower Wednesday after the Dow Jones industrial average lost ground in early trade.
Relief over the small rate hike by the Federal Reserve Tuesday yielded to selling pressure as an ongoing tug-of-war between "old" and "new" economy sectors saw big retailers gaining ground at the expense of some telecoms and high-tech stocks. Zurich bucked the trend with a 1.7 percent rally.
The benchmark FTSE 100 index in London finished 0.1 percent, or 8.3 points, lower at 6,609.6 after profit taking eroded sharp early gains on Europe's biggest market in the wake of Wall Street's surge Tuesday. Solid performances by a leading retailer and a natural gas distributor buoyed the index
In Frankfurt, the electronically traded Xetra Dax closed down 9.31 points at 7,798.62 as losses in index heavyweight Deutsche Telekom and tech bellwether Siemens offset a sharp rise in insurer Munich Re. The CAC 40 shed 0.7 percent, or 41.58 points, to end at 6,279.29. But Swiss traders shrugged off the early softness on Wall Street, sending the SMI 1.7 percent higher to 7,388.2, led by strong demand for old economy stocks such as CS Group and Roche.
The pan-European FTSE Eurotop 300, a broader index that gives a snapshot of regional trends, climbed half a percent to 1,633.69, nudged higher by gains in its gas distribution, retailing, transport, food and drug, computer, insurance and information technology segments. On the downside, forestry and paper components, tobacco, electricity and steel stocks all lost between 2 and 5 percent.
European markets gave back some impressive early gains Wednesday as profit taking kicked in following an initial spurt triggered by relief over the Fed's decision Tuesday to raise its main lending rate by only a quarter percentage point, to 6 percent. The Fed warned, however, that further credit tightening lay ahead.
Retailers rally in London
Trading in London was characterized by the now-familiar selling of tech stocks in favor of so-called "old economy" industries. Gas distributor BG Group (BG-) ended up 10.8 percent at 336 pence after the company disclosed plans to demerge its gas pipeline business. Transport and retail stocks also outperformed. British Airways (BAY) climbed 5.9 percent, continuing the airline's ascent since the abrupt departure of CEO Robert Ayling several weeks ago.
A 25 percent jump in 1999 earnings reported by retailer Kingfisher (KGF) sent the stock soaring 9.5 percent, while competitor Marks & Spencer (MKS) spurted 6.1 percent, buoyed by restructuring enthusiasm. GUS (GUS), or Great Universal Stores, shot up 11.1 percent.
On the downside, index heavyweight Vodafone AirTouch (VOD) slumped 2.6 percent, contributing about 54 points of downward pressure on the index. Many of the technology firms that recently joined the blue-chip FTSE 100 were down: Internet security firm Baltimore Technologies (BLM) sank 6.9 percent, followed lower by slightly smaller losses at palm-top computer maker Psion (PON) and Internet access provider Freeserve (FRE). Psion fell 5.9 percent, while Freeserve shed 4.2 percent.
Paris showed similar distress in the tech sector. Chipmaker STMicroelectronics (PSTM) shed 2.3 percent, telecom equipment maker Alcatel (PCGE) fell 2.4 percent, and data network operator Equant (PEQU) retreated 3.5 percent. Index heavyweight France Telecom (PFTE), meanwhile, gave up almost 4 percent.
Pulling the other way, food processor Danone (PBN) rose 6.8 percent as it continued to bask in Tuesday's sale of its brewing unit.
In Frankfurt, telephone operator Deutsche Telekom (FDTE) dropped 2.5 percent and engineering and electronics leader Siemens (FSIE) fell 6.9 percent, offsetting a 2.9 percent gain in accounting software maker SAP [FSE:FSAP3] and a 6.6 percent jump in insurer Munich Re.
Consumer goods firm Henkel (FHEN) rose 3.7 percent after the company posted an 8 percent rise in 1999 profit on a narrow increase in sales. Automaker BMW (FBMW) advanced 4.1 percent on persistent takeover speculation, despite the company's repeated denials that it is in merger talks.
In Zurich, CS Group spearheaded the blue-chip charge with a 6.4 percent spike, while pharmaceutical company Roche advanced 3.2 percent and specialty chemical maker Clariant rose 4.7 percent. 
-- from staff and wire reports
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