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Bourses dip into the red
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March 18, 1999: 1:22 p.m. ET
Europe's markets find little to cheer as Wall Street offers little support
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LONDON (CNNfn) Europe's bourses saw red Thursday after Wall Street failed to make much headway in early trading and nerves were still frayed after a 550-point nose-dive in Tokyo overnight.
Investors also were mindful that the European Central Bank was unlikely to offer any comfort. The ECB announced it was leaving interest rates unchanged after the markets closed Thursday, confirmed analysts' expectations.
In Frankfurt, the electronically-traded Xetra Dax was saved from ending below the psychologically important 5,000 mark by a slightly firmer Wall Street. German blue chips closed 37 points lower at 5,025.79, a drop of 0.73 percent.
The FTSE 100 ended the session off its lows, closing 26 points down at 6,114.3. The index earlier had fallen below the 6,100 mark but staged a small recovery as selling pressure eased on Wall Street moving into the black.
This was the fifth consecutive fall in London, after the benchmark index hit record highs last Thursday.
Paris blue chips were the only ones to venture into the black during the session. The CAC 40 was up 0.65 percent around midday but a lack of sustained buying in the afternoon saw it tumble back into the negative column. The index closed down 0.42 percent at 4,152.64, a fall of almost 18 points.
Zurich's SMI index fared slightly worse ending the session down 0.5 percent at 7,195.7 as investors eyed the expiration of index futures contracts Friday.
The oil sector bucked the trend across Europe, however, basking in the glow of ever firmer prices. May futures for benchmark Brent crude were trading around $13.60 per barrel.
In London, BP Amoco (BPA) was up over 2.85 percent at 1,030 pence, at one point touching a post-merger high of 1,043. Shell (SHEL) made even bigger gains, ending up 3.72 percent at 411-1/2.
Buying of the two French oil companies was more muted. Elf-Aquitaine (PAQ) put on 1.80 euros to 123.4, while Total (PFP) added 1.57 percent to close at 109.7.
The biggest gainer in London was shipping group P&O (PO.), which ended the session 5.33 percent higher at 793 pence. The stock was buoyed by news that its joint venture container line P&O Nedlloyd had a strong finish to last year and gave an upbeat assessment for the year ahead. Further impetus came from speculation that partner Nedlloyd may try to buy P&O out of the venture after disposing of the bulk of its standalone business.
Engineers were again among the biggest losers after selling continued amid concern over their prospects following Smith Industries' (SMIN) earnings report Wednesday. Smith's shares gave up 3.46 percent to close at 920 pence. Rolls-Royce (RR) lost 4.4 percent to 255-1/2 pence.
GKN (GKN) was off 2.18 percent at 975 pence. This fall despite the long-awaited announcement that the U.K. engineer would joint venture its Westland helicopter unit with Italian rival Agusta, owned by Finmeccanica. The Italian company's stock was fractionally higher in Milan, the only European bourse to post a gain Thursday.
Deutsche Bank (FDBK), Germany's largest financial institution, lost ground with sellers pushing the stock almost 3 percent lower at one point. The shares closed down 1.07 euros at 51.00, a fall of just over 2 percent. Traders were unhappy with Deutsche's plans to increase its equity capital by up to six billion marks ($3.4 billion) to help finance the bank's $10.1 billion purchase of U.S.-based Bankers Trust (BT). This increase was larger than expected and came as the bank confirmed its 1998 profit.
One of the biggest losers among blue chips was Mannesmann (FMMN). Investors reacted badly to news from the telecom side of the business, after the company said Thursday its Arcor fixed-line and Mobilfunk D2 cellular units planned to cut calling charges in April. The shares slipped almost 4 percent to 114.30 euros.
Carmaker BMW (FBMW) went the other way despite announcing bigger-than- anticipated losses. Its U.K. car subsidiary, Rover, was entirely to blame for the plunge in earnings. Instead, traders focused on the BMW car unit, which boosted operating profits by almost 25 percent. The shares closed 2.6 percent higher at 639.50 euros.
The biggest gainer in Paris was pay TV giant Canal Plus (PAN). Traders piled back into the stock after losses in previous sessions. The shares were up 5.31 percent at 253.8 euros.
French luxury goods group LVMH (PMC) was not far behind. Its shares put on 4.85 percent to close at 231.2 euros. The group cheered the market with its bullish assessment of the year ahead and a commitment to grow operating profit by at least 15 percent as it unveiled its 1998 results. Net income declined 29 percent below most analysts expectations.
The luxury group, which makes products ranging from perfume to handbags, said it was also hopeful of healing the rift with Italian fashion house Gucci.
Insurance giant Axa (PCS) slipped 1.09 percent to end at 127.10 euros. The group disclose a 27 percent rise in earnings for 1998, at the top end of expectations but traders were disappointed with comments about its role in the consolidation of the European financial services industry.
-- from staff and wire reports
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