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Paris bucks flat Europe
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May 31, 2000: 12:20 p.m. ET
Region's telecom shares mixed as London is hit by drug and bank sales
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LONDON (CNNfn) - European equity markets ended mixed Wednesday on subdued volume as only the blue-chip index in Paris managed to sustain momentum from its rally in the previous session. Frankfurt and London drifted in and out of the red before closing marginally lower.
Telecom shares, which had driven bourses ahead Tuesday, failed to shine, and while some technology stocks rebounded in the wake of the Nasdaq composite's surge Tuesday it was oil and gas shares that underpinned the market.
The CAC-40 in Paris was the best performer of the region, closing up 100.77 points at 6,426.26 as the market surged in late afternoon trading. France Telecom ended 5.1 percent higher as investors appraised its $40.3 billion acquisition Tuesday of Orange, Britain's third-largest mobile operator.
London's benchmark FTSE 100 index closed down 0.3 point at 6,359.30, its fall limited by strong performances by its two largest oil and gas shares, BP Amoco and Shell Transport & Trading, which each added more than 2 percent. Financial and drug stocks were the main drag.
In Frankfurt, the Xetra Dax closed down 10 points, or 0.13 percent, at 7,109.67, having bobbed back and forth into the red during the session. Deutsche Telekom provided support with a 2.3 percent advance.
The Dow Jones industrial average was flat at the close of business in Europe, and the Nasdaq was 0.4 percent lower
 The early-session enthusiasm for technology, media and telecom (TMT) stocks started to wane around midday, with some analysts noting that the gains didn't indicate that such shares could sustained a revival.
"We believe that the rotation out of TMT has further to run," JP Morgan strategist Tim Harris said, citing expected rises in euro-zone interest rates as a motivation for investors continuing selling out of those industries.
The pan-European FTSE Eurotop 300, an index of the region's largest stocks, ended 0.3 percent higher at 1,595.23, with its oil and gas sub-index rising 2.4 percent. Auto, chemical and tobacco shares all lost ground.
In the currency market, the euro ended European trade at $0.9330, level with late trading Tuesday in New York, though the single currency climbed 1.5 percent against the yen to a five-week high of ¥100.49.
London hit by drug declines
London's FTSE 100 was split evenly between gainers and decliners, with energy and technology shares posting the largest advances. Declines in heavily weighted financial and drug stocks pulled the FTSE 100 into the red.
Computer services provider CMG (CMG) led the market with a 12.5 percent advance as investors moved in to pick up a stock that has slid sharply in recent weeks.
Among telecom shares, Telewest Communications (TWT) was best placed with a 4.6 percent advance, but it was energy stocks that provided the heavyweight firepower for the FTSE 100's advance.
 BP Amoco (BPA) rose almost 3 percent and rival Shell Transport & Trading (SHEL) posted a 2.6 percent gain as oil prices climbed again.
Engineering and electronics firm Invensys (ISYS) slumped more than 13 percent after the company agreed to buy troubled Baan for  2.85 a share, valuing the money-losing Dutch software developer at 762 million ($709 million). Baan stock rose 13 percent after being almost 30 percent ahead at one point.
Britain's second-biggest supermarket operator, J. Sainsbury (SBRY), fell 10.75 percent after undershooting full-year earnings expectations.
Glaxo Wellcome (GLXO) fell 3 percent after the company withdrew an application to European regulators for approval for its flu treatment Relenza. Merger partner SmithKline Beecham (SB-) lost 1.27 percent.
Lloyds TSB (LLOY) led the retreat among financial shares, down 2.4 percent, and rival Barclays (BARC) was 1.5 percent lower at the close.
Internet service provider Freeserve (FRE) ended 8.6 percent higher amid reports that electronics retailer Dixons was seeking bids for its 80 percent Freeserve stake. Freeserve stock jumped 25 percent Tuesday. Analysts said Germany's T-Online and Spain's Terra Networks are viewed as favorites to buy the firm. Dixons (DXNS) shares closed 1.4 percent lower.
France Telecom lifts Paris
In Paris, media and telecom shares advanced while 'old economy' auto shares and banking stocks held the market back.
France Telecom (PFTE) closed 5.1 percent higher, a day after agreeing to buy Orange, the U.K.'s third-largest mobile-phone company, from Vodafone AirTouch (VOD) for $40.3 billion.
Missiles and media firm Lagardère (PMMB) led the index with a 5.8 percent advance while  oil and gas producer TotalFinaElf (PFP) rose 4.6 percent to continue its strong recent run.
Tire maker Michelin (PML) lost 2.9 percent while Valeo (PVAL), Europe's largest maker of auto components, dropped 3.6 percent.
In Germany, Deutsche Bank (FDBK) was the best performer, closing up 3.3 percent. Deutsche Telekom (FDTE), the largest component on the Dax, gained 2.3 percent.
Retailers and chemical firms pegged back the market, with supermarket operator Metro (FMEO) down 4.8 percent while chemical firm BASF (FBAS) lost 3.1 percent.
Among smaller markets, the SMI in Zurich ended flat while the AEX in Amsterdam and Ibex 35 in Madrid both gained 0.4 percent. Milan's Mib-30 lost almost 1 percent.
In Helsinki, paper producer Metsä-Serla lost 5.6 percent after agreeing to pay 2.3 billion to buy Modo Paper.
Brewer Carlsberg gained 5 percent in Copenhagen after it agreed to buy the brewing interests of Norway's Orkla. 
-- from staff and wire reports
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