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Bourses finish strongly
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November 20, 1998: 12:54 p.m. ET
Financial stocks power European markets to healthy gains
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LONDON (CNNfn) - European stock exchanges ended the week with a flourish Friday, although there was little news to spark their enthusiasm.
Hopes of a recovery in the Japanese economy, and Tokyo's strong run overnight, set the tone for a positive morning in Europe.
Signs that the New York market would open higher helped maintain the good showing in late European trade.
In London the FTSE 100 jumped 2 percent, 111.3 points, to 5,715.5.
Frankfurt's Xetra DAX jumped 2.2 percent, 105.74 points, to close the week at 4,911.43. Some dealers were optimistically eyeing the psychologically-important 5,000 limit.
In France the CAC 40 gained 95.94 points, 2.6 percent, to close at 3,802.7.
Switzerland's SMI bounced 2 percent, 144.2 points, to 7,138.0.
The markets' strong finish to the week was on the back of a thin news day. Corporate results were few and far between, and there was only one deal of any note in Europe Friday.
Havas, controlled by French utility Vivendi, said it had agreed to a $1 billion price for the software unit of U.S. group Cendant (CD). Vivendi shares rose 3 percent in Paris.
London's FTSE 100 has enjoyed a good run this week, and is fast approaching its all-time peak of 6,183, reached in July.
Analysts warn though, that the blue-chip FTSE 100 is leaving small-cap indexes far behind. This could signal that nervous investors are going for highly liquid stocks, so if the market takes another tumble they will be able to get out quickly.
The week ended in superb fashion for U.K. banking stocks, a trend that was reflected across the whole of the European financial sector.
Leading the charge in London was National Westminster Bank, which surged 7 percent to 1,102 pence. Not far behind were Lloyds TSB and Royal Bank of Scotland, which both ran up 6 percent.
Biggest gainer in the FTSE 100 though was troubled entertainment group EMI. First-half results are due Tuesday, and analysts expect profit at the company to drop by a third.
Of more interest to the market Friday were rumors that Rupert Murdoch's News Corp. is keen on getting a stake in the group.
EMI shares soared 17 percent to 400 pence.
Star of the day in France was Societe Generale. Shares in the bank were suspended limit-up at one stage, and they ended the day having jumped 12 percent to 875 francs.
Fellow banks such as BNP and CCF rose more than 6 percent.
Such a storming performance put the rest of the market in the shade, although there was a 5 percent gain at index heavyweight Alcatel and a 4 percent rise in Elf Aquitaine shares.
In the export-sensitive German market the dollar rose against the mark, at one stage it rose above 1.69, helping many stocks to close higher.
Auto stocks were the prime beneficiaries, although the 6.7 mark rise to 154.25 marks at DaimlerChrysler may have had more to do with fund managers adjusting their portfolios to account for the heavier weighting of the newly merged company.
DaimlerChrysler started trading Tuesday at 140.9 marks, and has risen every day since.
Rivals Volkswagen and BMW have not been able to keep up that pace, but they have made strong gains of their own. Friday VW shares rose 5 marks to 138 marks, while BMW stock jumped nearly 2 percent to 1,165 marks.
HypoVereinsbank led the surge by the financials, rising 5 percent to 129 marks.
Conglomerate Viag remained in the doldrums. Under pressure all week after a rumored takeover of Swiss group Alusuisse went down badly with investors, the shares staged a mini-revival Friday morning.
The shares' strength only encouraged more sellers to come out of the woodwork, however, and the stock ended the day up only 1 mark at 1,026 marks.
Banks UBS and CS Group performed well in Zurich, rising by 4 percent and 5 percent respectively.
Amsterdam broke the trend, by allowing industrials to outshine financial stocks. The index gained more than 3 percent, powered higher by an 8 percent rise at chemicals group Akzo Nobel and a 9 percent surge in steel maker Hoogovens' shares.
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