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Bourses beat a retreat
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November 24, 1998: 12:58 p.m. ET
Heady gains evaporate as European markets returns to reality
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LONDON (CNNfn) - Heady gains Monday evaporated Tuesday in Europe, as investors paused to reconsider the tremendous upsurge in the markets in recent weeks.
Asia's overnight rally and Wall Street's record finish Monday helped most European markets into positive territory early Tuesday.
That enthusiasm waned, though. A dismal opening on Wall Street put more pressure on the European exchanges, and most of them finished the day at, or near, their lows for the session.
In London the FTSE 100 dropped through the 5,800 barrier to close at 5,798.3, a decline of 50.1 points.
Germany's Xetra DAX also passed a psychological resistance level when it fell back under the 5,000 level. The index ended the day down 1.4 percent, 69.97 points, at 4,954.54.
In Paris the CAC 40 index eased just 6.43 points to 3,839.38, while Zurich's SMI tumbled 2.2 percent, 164 points, to 7,170.3.
One of the few successes in London was British American Tobacco (BATS). The stock jumped more than 2 percent to 545 pence after the group announced price rises at its U.S. subsidiary Brown & Williamson. The move follows similar actions by rivals.
Heading in the opposite direction were British Telecom (BT.A) shares. News that the European Commission is examining the group's joint venture with AT&T (T) sent the stock down nearly 4 percent to 861 pence.
Pearson (PSON) shares headed south initially, but then recovered to end the day up 2 percent at 1,075 pence. The media group announced that its $860 million sale of two publishing units had collapsed.
Half-year earnings from music group EMI (EMI) were bad, but better than many had expected. That did the group some good, although investors preferred to focus on its failure to land a new chief executive officer and the absence of news on any strategic partners.
The shares eased 1 percent to 361 pence.
Industrial gas supplier BOC (BOC) tumbled 3 percent to 893 pence after it announced it is selling its German and Benelux operations to France's Air Liquide (PAI).
Analysts in Paris liked the deal though, and marked Air Liquide shares up 6 percent to 966 francs.
Elsewhere in London insurers gave up a large chunk of Monday's gains. Norwich Union {LSE:NU] led the sector down with a 4 percent drop to 440 pence.
The session in Paris was marked by a correction among the financial sector which led the market up Monday. Paribas (PPM) edged up 1 percent to 496 francs, but CCF (PCCF) and BNP (BNP) gave up some of their recent gains.
The DaimlerChrysler juggernaut finally ran out of steam in a dull day in Frankfurt. The stock eased 2.3 marks to close at 155.2 marks - its first daily decline since the stock was created a week ago.
Deutsche Bank (FDBK) slipped after Monday's euphoria. The shares ended the day off 4.75 marks at 104.6 marks.
Other banks stocks declined in sympathy.
The Zurich exchange succumbed to profit taking, led down by UBS - off 12 francs at 430 francs - and Nestle, which slipped 67 francs to 3,123. The food manufacturer is due to report 10-month sales figures Wednesday.
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