|
Gloom hits European markets
|
 |
March 17, 1999: 1:17 p.m. ET
All but one bourse depressed as Dow heads away from 10,000 mark
|
LONDON (CNNfn) - Gloom set in across Europe Wednesday as all but one of the region's main bourses closed lower after the Dow continued its decline from Tuesday, when it briefly touched the 10,000-point mark.
The FTSE 100 carried on from where it left off in the last session, failing to make any headway. London's blue chips fell almost 1 percent, shedding 61 points to close at 6,140.6.
Even strong hints from the Bank of England that it is considering further interest rate cuts failed to stir investors. The central bank's thinking was revealed in minutes from its Monetary Policy Committee, released Wednesday morning.
The committee's last meeting snapped a run of five straight reductions in interest rates when the committee voted 8-to-1 to keep rates unchanged.
In Frankfurt, the leading shares fell back again after a brief rally that took the market into positive territory. The benchmark Xetra Dax index ended 0.56 percent lower at 5,062.59, a drop of just over 28 points.
In Paris, the CAC 40 index also lost ground, closing 16 points lower at 4,170.01, a drop of 0.39 percent.
Only Swiss equities managed to end the day in the plus column. In Zurich, the SMI just closed in positive territory, up just under 13 points at 7,231.8, reversing small losses in the morning session. But dealers didn't expect the blue chip index to break out of the tight technical range it had recently established.
European markets again appear to have taken little notice of the fact that the European Union faces its biggest constitutional crisis in its 42-year history, after the surprise resignation Monday night of all 20 commissioners in the executive arm amid allegations of fraud and cronyism.
Investors believe the news had little effect on stocks, as the executive body isn't involved in setting fiscal policy.
Despite the overall gloom, oil stocks put in strong performances after the oil price breached the $13 per barrel mark. Benchmark Brent crude futures were up at the $13.13 level and analysts believe they could push as high as $14 next week, when the details of the oil production cuts agreed to recently become clear.
BPAmoco (BPA.) and Shell (SHEL) were among the biggest gainers among London blue chips. BP shares put on 3.2 percent to close at 972 pence, while the Anglo-Dutch oil giant's stock put on 9-3/4 pence to close at 397-1/4.
French oil producer Elf-Aquitaine (PAQ) surged over 4 percent in Paris to end the session at 121.6 euros. Total (PFP) closed up 1.22 percent to 108 euros.
U.K. engineers had a torrid time, after Smith Industries (SMIN) reported half-year earnings in line with forecasts. The disclosure prompted a raft of recommendation downgrades, as analysts said the figures were already priced in the share price, which has enjoyed a strong run over the past six months.
Smith's shares led the decline, closing at 955 pence after having almost 10 percent wiped of their value, the biggest loser in the FTSE 100. BTR Siebe (BSBE) was pulled down in a selling spree, closing 4.5 percent lower at 273 pence.
U.K. satellite broadcaster BSkyB (BSY) slipped 1.59 percent to 541 pence on a report in the Daily Telegraph that the U.K. competition watchdog was set to block the Rupert Murdoch-controlled group's takeover of Manchester United (MNU). Shares in the world's most profitable soccer club nose-dived almost 9 percent to 221 pence.
In Paris, French carmaker Renault (PRNO) was the biggest loser among blue chips after it confirmed that is in talks with Japan's Nissan Motor Co. to acquire a stake of up to 40 percent in the company. The move would effectively give Renault a veto over board decisions at Nissan. Investors balked at the prospect, with cultural differences and Nissan's massive $18 billion debt load among the main concerns. Renault's stock slumped 6.18 percent to close at 31.40 euros.
Telecom stocks across the continent were also in the spotlight, with two of the sector's heavyweights reporting earnings. Dutch-based KPN was hit after disclosing a 5 percent rise in 1998 operating income but warning of a tough year ahead. The shares dropped more than 7 percent in Amsterdam to 37.50 euros. France Telecom (PFTE) closed over 1 percent lower at 76.80 euros, with the company due to report after the close Wednesday.
In Italy, the latest bout in the Olivetti hostile bid for Telecom Italia played itself out after the market closed. Olivetti was due to disclose its strategy for Telecom Italia. Telecom Italia shares shed 0.02 euro to 9.37, while Olivetti was down a similar amount at 2.97.
In Frankfurt, Lufthansa (LHA) was one of the strongest performers after reports that it is set to take a stake in Thai Airways helped lift the carrier through a technical barrier. The airline's stock was up 5.36 percent at 21.60 euros.
Electronics giant Siemens (FSIE) lost much of its earlier gain but still ended the day up 1.15 percent at 61.29 euros after the company said it would float its semi-conductor business by early next year.
Hoechst's (FHOE) shares were up 3.6 percent at 43 euros as the market digested the news that its merger with French chemical giant Rhone-Poulenc (PRPP) will be completed ahead of schedule. Rhone's shares fell 0.89 percent in Paris.
Germany's Schering (FSCH) was down almost 1 percent at 112.05 euros after the drugs company reported that 1998 operating profit dipped 3 percent.
In Zurich, the world's biggest cement producer, Holderbank, led the way after a recommendation upgrade put a price target of 1,800 Swiss francs on the stock. The shares put on 4.01 percent to close at 1,662 Swiss francs.
--from staff and wire reports
|
|
|
|
|
 |
|
