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Europe closes higher
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June 26, 2000: 3:35 p.m. ET
Auto stocks rev up in Paris, banks rally in Frankfurt, deals spark London index
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LONDON (CNNfn) - Europe's major markets closed higher Monday as automotive sector stocks sped ahead in Paris, deal-making sparked gains in London and the financial service sector fared well in Frankfurt.
The CAC 40 index in Paris revved up 40.91 points, or 0.6 percent, to 6,586.26 as tire maker Michelin (PML) rose 5 percent, leading the way among auto-sector stocks, which accounted for 3 of the top 4 gainers in that blue-chip index.
London's benchmark FTSE 100 added 13.7 points, or 0.2 percent, to 6,405.2, led by cable company Telewest Communications (TWT), which rallied 9.1 percent after United Pan-Europe Communications, the Dutch leader in European cable TV, agreed to take a 25 percent stake in the U.K. firm for $3.5 billion. UPC shares closed up 8.8 percent. 
Thw Xetra Dax in Frankfurt was up 46.78 points, or 0.67 percent, to 7,027.19 on broad gains for banking and chemical stocks.
The FTSE Eurotop 300, a broad measure of the region's largest stocks, shed 0.2 percent to 1,603.88, with gains for its chemical and tobacco sub-indexes offset by declines in computer hardware and steel firms.
European eyes on the Fed
Analysts said they expected equity markets to wobble this week as investors await the Federal Reserve's next decision on U.S. interest rates, and weigh the implications of continuing strong economic growth and rising price pressures in the 11-nation euro zone.
"I think this is going to be a nervous week," John Shepperd, global market economist at Dresdner Kleinwort Benson in London, told CNNfn. Although the consensus is that U.S. rates will stay on hold, economists expect the Fed to say it has a bias toward raising rates in the future.
Wall Street cemented its gains as Europe's leading markets closed. The Dow Jones industrial average was up about 1.5 percent while the Nasdaq composite was up about 1.6 percent.
In the currency markets, the euro reversed its losses against the dollar, trading at 93.90 U.S. cents, up slightly from 93.58 cents in New York late Friday. The common currency slid 3 percent against the greenback last week. The yen fell to ¥105.60 from ¥104.75 on Friday.
Plunge strikes Freeserve again
Britain's largest Internet service provider Freeserve (FRE) fell 16.8 percent after it dampened investor expectations that it might soon be the subject of a £6 billion ($9 billion) takeover offer from Germany's T-Online. The U.K. firm said talks are continuing, but aren't likely to lead to an offer any time soon.
Shares of Freeserve now are down 61 percent from their record high of 920-3/4 pence a share set March 3. They are down 35 percent since June 2 alone.
Electronics retailer Dixons (DXNS), which owns 80 percent of Freeserve, fell 7.2 percent, but rallied from its earlier lows.
 Also in London, music publisher EMI (EMI) rallied 4.4 percent after shareholders approved a $20 billion joint venture with Warner Music, a unit of CNNfn.com parent Time Warner Inc.
Shares of steel company Corus (CS-) dropped 4.4 percent after the company posted a loss for the first half of its fiscal year 2000, due in part to a strong British pound.
Mortgage bank Woolwich (WWH) rose 4.2 percent as financial-services stocks also moved ahead. Lloyds TSB (LLOY) added 4.4 percent and Barclays (BARC) gained 2.6 percent.
Banks drive Dax ahead
In Frankfurt, Commerzbank (FCBK) rose 2.7 percent after a media report said Spanish bank BSCH and Italy's Banca Intesa could step in if merger talks between the German bank and Dresdner Bank (FDRB) failed to deliver a deal.
Rival HypoVereinsbank (FHVM) was 4.3 percent higher and reinsurer Munich Re [FSE:FMUV3] was the best performer on the Xetra Dax, with a  4.5 percent gain.
Sporting goods maker Adidas Salomon (FADS) gained 2.4 percent.
The tech sector was mixed, with software publisher SAP [FSE:FSAP3] up 2.5 percent while chipmaker Infineon (FIFX) shed 3.1 percent. Airline Deutsche Lufthansa (FLHA) lost 4.5 percent, leading the Dax losers, the same day a strike by airport staff in France triggered the cancellation of flights to Paris.
Nokia shares tumble
Automotive sector plays led performers in Paris, with automaker Renault (PRNO) rising 3.4 percent and auto parts maker Valeo (PFR) up 2.8 percent.
Leading all CAC 40 gainers was hotel operator Accor (PAC), which added 5.6 percent. Food service provider Sodexho Alliance (PSW) rose 2.1 percent.
Defense electronics firm Thomson-CSF (PTHO) was the biggest loser, off 2.9 percent.
Groupe Danone (PBN) added 2.9 percent after the packaged food company saw its joint bid with Britain's Cadbury Schweppes (CBRY) to buy U.S.-based Nabisco Holdings trumped by a $15 billion offer from Philip Morris (MO: Research, Estimates). Cadbury was little changed.
In Helsinki, Nokia slumped 5.2 percent after a sharp slide in the mobile-phone maker's New York-listed stock Friday. Sonera, Finland's leading telecom operator, gained 7.3 percent, extending last week's gain after the company said it was in merger talks with other mobile telecom firms. 
-- from staff and wire reports
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