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Bourses show mixed results
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March 15, 1999: 1:01 p.m. ET
FTSE 100 hit by sell-off in telecoms; Frankfurt, Paris hold on to small gains
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LONDON (CNNfn) - Europe's bourses ended mixed with Frankfurt and Paris just scraping into positive territory following a day of topsy-turvy trading. London felt the brunt of selling in the telecom sector and even a surge by the Dow towards the magic 10,000 mark failed to lift the mood.
The FTSE 100 failed to make any headway during the session, closing 1.2 percent, or 75 points, lower at 6,206.8, after hitting record highs last week.
Germany's market, which rallied over 5 percent Friday in the wake of Oskar Lafontaine's resignation as Germany's finance minister, was choppy. The fall-out of his sudden departure made for a confusing political picture that was mixed with encouraging economic data. As a result, the electronically-traded Xetra Dax just managed to cling to 12 point gain, ending the session 0.24 percent higher at 5,043.23.
The French exchange also made a similar unimpressive gain. The CAC 40 in Paris put on just over 10 points to finish at 4,185.12.
In Zurich, a quiet session left the SMI fractionally down, 0.14 percent lower at 7,240.9.
In London, traders reacted negatively to the sale of a 10.2 percent stake in telecom giant Cable & Wireless (CW.) by German conglomerate Veba (FVEB) at a sizable discount to Friday's closing price. C&W's shares took the biggest drop of the session, slumping almost 10 percent to end at 747 pence. Veba didn't name the buyer and Hong Kong-based Hutchison Whampoa, which was rumored as a possible buyer, already has denied it was involved.
The knock-on effect left the telecom sector, the biggest constituent of the FTSE 100, nursing its wounds. Telewest (TWT) had almost 8 percent wiped off the value of its shares to end down at 243-1/2 pence. Colt Telecom (CTM) gave up 5.5 percent to 929-1/2, while British Telecom (BT) fell almost 3 percent to 1,050 pence.
Elsewhere, conglomerate Tomkins (TOMK) fell over 4 percent to 224 pence, after the market expressed its disappointment at a proposed share buy-back of up to 15 percent of stock. The company, which owns gun maker Smith & Wesson, is due to exit the blue chip index later this month after a dismal performance in recent months.
The U.K. arm of Anglo-Dutch publishing giant Reed Elsevier (REED) was one of the biggest gainers, putting on 4.75 percent to 526 pence, after suffering from heavy selling last week.
In Frankfurt, Veba put on 2.8 percent to close at 53.95 euros after the conglomerate revealed it had netted 2.6 billion marks from its sale of the C&W stake.
Economic data showing that manufacturing orders posted a rise for the first time in six months barely registered in the market, however. The figures were overshadowed by political in-fighting following Lafontaine's exit, revealing a potentially damaging rift within the Social Democrats, who lead the ruling coalition.
Carmaker DaimlerChrysler helped add grist to the mill when it added its weight to concerns by German big business about impending tax reforms. The company has joined insurers and utilities in threatening to quit the country if the changes go ahead. The shares were up 0.25 euros at 84.75.
One of the biggest gainers was industrial group Thyssen (FTHY). The shares rose almost 7 percent to 179.50 euros on the back of court decision that cleared the way for its merger with fellow engineer Krupp (FFKR). The latter's stock jumped almost 7.5 percent to 136.50 euros.
Energy group, RWE, lost almost 7 percent to close at 43.90 euros in apparent profit-taking after a two session surge saw the stock rise by 24 percent.
In France, banking shares remained the focal point, as the government cleared the way for the privatization of state-controlled Crédit Lyonnais.
BNP's (PBNP) surprise twin takeover bids for Paribas (PPM) and Société Générale (PGLE), which were in the process of merging themselves, was also center field. SocGen and Paribas launched a joint attack Monday, accusing BNP of merely trying to scupper their own plans, adding that a three-way link-up created "negligible added value". BNP shares closed 2.5 percent lower at 78 euros, while SocGen was up 0.30 euros at 164. Paribas closed 0.1 percent lower at 100.1.
French tire maker Michelin (PML) was up 3 percent at 41.44 euros, ahead of the group's 1998 results, which were due out after the market had closed Monday.
French carmaker Renault (PRNO) also was in vogue, following reports that it is nearing the end of talks with Nissan Motor to acquire a 33 percent stake in the Japanese company. Sources told CNN a statement from Renault confirming the deal is likely this week. The stock ended the day 1.2 percent lower at 35.40 euros.
The Swiss market was quiet ahead of the results of two blue chips reporting 1998 results Tuesday. Drugs giant Novartis fell 18 francs to 2,583, while banking giant Crédit Suisse Group was off 3 francs at 249.50 ahead of their respective earnings reports.
-- from staff and wire reports
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