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Europe casts off EU shock
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March 16, 1999: 6:07 a.m. ET
Asian gains and Dow's record close outweigh mass resignation in Brussels
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LONDON (CNNfn) - Most of Europe's main equity markets traded higher Tuesday, shaking off concerns about the mass resignation of the European Union's executive arm and instead focusing on the Dow's flirtation with the 10,000 mark and positive signals out of Asia.
Most equity analysts viewed the decision by the 20 European commissioners on the executive to step down as a side issue. "It doesn't seem to be having a negative impact," Nick Knight, head equity strategist at Nomura Securities told CNNfn.
The currency markets took a dimmer view of the departures, amid allegations of corruption and cronyism, although the euro started to recover from a near- record low against the dollar.
The electronically-traded Xetra Dax led the way, although it pared some of its earlier gains. Frankfurt's blue chips were up 1.1 percent at 5,098.51.
London's FTSE 100 started to recover some of the ground it gave up in telecom-inspired losses Monday. Europe's biggest bourse was up 36 points to 6,243.2, taking its cue from the Dow's tilt toward 10,000, rather than the turmoil within Europe.
Zurich's SMI was up 0.2 percent at 7,256.1, while in Paris, the CAC 40 index slipped mildly lower, down just 4 points at 4,181.09.
In Frankfurt, conglomerate Viag (FVIA) was up just over 2 percent at 512 euros after the Swiss authorities cleared its proposed take-over of metals group Alusuisse. The Swiss company's shares were up 6 francs at 1,706 in Zurich.
In London, cable operator Telewest (TWT) gave up most of its early 5 percent surge after reporting 1998 earnings. The stock was 1.85 percent higher at 248 pence, after big losses Monday.
Colt Telecom (CTM) took up the running and was 3.3 percent higher at 973 pence.
Pharmaceuticals group Zeneca (ZEN) was up 3.7 percent at 2,495 pence, after its proposed merger partner, Swedish drugs company Astra, made positive noises about gaining U.S. approval for the deal.
Elsewhere other pharmaceutical stocks were moving as well. Swiss giant Novartis said net income last year rose 16 percent to 6.06 billion Swiss francs ($4.15 billion) but warned of a difficult market climate for agribusiness, especially in the crisis-wracked countries such as Russia and Brazil.
Nonetheless, Novartis predicted new drug development and higher outlays on marketing would buoy sales in the short term. The company also said it expects operating profits to improve in 1999 as greater efficiencies and sales volumes kick in. Novartis shares were up 12 francs at 2,595.
CS Group, the holding company of Crédit Suisse, posted a jump in 1998 profit after extraordinary items to 3.1 billion francs from 397 million francs, but said it expected volatility ahead as financial markets remain on edge. CS First Boston, the group's investment banking division, posted a net loss of 221 million Swiss francs, a sharp reversal from profits of 1.573 billion francs in 1997.
CS Group stock rose 9.50 francs to 259.
In Paris, the biggest gainer was tire maker Michelin (PML), which posted results after the bourse closed Monday. The shares lost some of their early sparkle but were still up over 3.4 percent at 42.85 euros, after the group said net profit for 1998 slipped 10 percent to 3.51 billion francs ($585 million).
Car maker Renault (PRNO) is also in the spotlight. The French group is believed near an announcement on an equity tie-up with Japan's Nissan. The Renault board meets later Tuesday and is expected to approve the deal, although the company wouldn't comment on whether it plans to discuss Nissan. Renault's shares were up 1.1 percent at 35.79 euros.
--from staff and wire reports
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