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Bourses end on mixed note
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March 16, 1999: 1:08 p.m. ET
Frankfurt shrugs off EU resignations; Dow failure to hold milestone hits London
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LONDON (CNNfn) - Europe's main bourses had a mixed day, although the shocking mass resignation of the European Union executive body appears to have played little part. Frankfurt registered the largest rise, but nervous trading on Wall Street, which saw the Dow touch the 10,000 mark before retreating again, left London in the red.
Most equity analysts viewed the decision by the 20 European commissioners on the executive body to step down as a side issue.
The currency markets took a dimmer view of the departures, amid allegations of corruption and cronyism, although currency analysts believed the fledgling euro would weather the storm.
The electronically-traded Xetra Dax led the way throughout the session, although it pared some of its earlier gains. Frankfurt's blue chips closed just under 1 percent higher, putting on 48 points to 5,090.93. The market is still benefiting from last week's resignation of left-leaning finance minister Oskar Lafontaine.
In Paris, the CAC 40 index was boosted by a rally in banking shares, which saw the blue-chip index move into the black in afternoon trading to close just over 1 point higher at 4,186.35.
London's FTSE 100 failed to recover any ground after the telecom-inspired losses Monday. The index closed down 4.9 points at 6,201.9, taking its cue from the Dow's failure to hold on to its historic breach of the 10,000 mark.
"London's trading is probably more closely linked to that of Wall Street than the other markets in Europe," Gary Dugan, European equities strategist at JP Morgan, told CNNfn.
Zurich's SMI also fell as foreign buyers stayed out of the market. The index closed down 22 points at 7,218.9.
In Frankfurt, industrial group Preussag (FPRS) jumped 4.5 percent to 489 euros after the group said the sale of 50 percent of its shipbuilding unit to Deutsche Babcock (FDBC) had got the green light, Reuters reported.
Germany's national carrier, Lufthansa (FLHA), put on 0.89 euros to close at 20.50 on news that the airline would bid for a stake in Thai Airways.
Dresdner Bank (FDRB) added 3.4 percent to close at 39.80 euros, as investors continued to bet that merger activity among French banks would spill over.
In Paris, banking stocks were again at the center of frantic trading after press reports that Deutsche Bank (FDBK) would support BNP's (PBNP) bid for Paribas (PPM) and Société Générale (PGLE).
BNP's shares were up 2.6 percent at 80 euros, while SocGen added 4.27 percent to 171 euros. Paribas put on just under 1 percent to end at 100.9 euros.
The banks pulled up the index, which was hit by a 5.5 percent slump in Renault's (PRNO) shares to 33.47 euros. Investors were worried about the impact of the French automaker taking a large stake in struggling Japanese rival Nissan. Renault was expected to make an announcement after its board meeting Tuesday.
Rhone Poulenc (PRPP) in contrast surged over 6.5 percent to 43.70 euros after Hoechst (FHOE) of Germany confirmed it was planning to speed up its planned merger.
In London, traders spent most of the session consolidating after the market eventually began to run out of steam following last week's budget. "Over the last couple of months the market has done relatively well and is now pausing to consolidate the gains," said Dugan.
Last week's budget also removed the likelihood of further interest-rates cuts, so investors are holding out for other reasons to start buying. "It needs a further catalyst to boost the market," said Dugan.
Retailers figured prominently among those losing out to profit taking. Electrical retailer Dixons (DXNS) lost 3.36 percent to close at 1,281 pence. Supermarket chain Safeway (SFW) gave up 4.42 percent to 242 pence and drug store chain Boots (BOOT) lost 3.43 percent to 878 pence.
In Zurich, Swiss pharmaceutical giant Novartis fell 51 francs to 2,539 after it 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.
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.
The results exceeded expectations, leaving the shares up 9.50 francs at 259.
--from staff and wire reports
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