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Europe takes cyclical twist
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April 15, 1999: 11:59 a.m. ET
Buffett warms to U.K. market but Europe closes flat despite Dow rally
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LONDON (CNNfn) - The shadow of Warren Buffett clouded a day of mixed corporate news as Europe's markets remained flat Thursday despite some sharp sectoral swings.
Buffet's disclosure of stake building in a U.K.-registered company sent some blue chips predictably higher, but London's FTSE 100 lost ground to close down 27.5 points or 0.42 percent at 6,466.1
In Frankfurt, the Xetra Dax bucked the downward trend in Europe, rising 2.96 points to 5,189.72.
The CAC 40 in Paris dipped 38.62 points to close at 4,310.64 and in Zurich the SMI index was down 144.1 points at 7,234.1.
European markets showed a strong switch to cyclical stocks, as the growth companies which have taken bourses to record highs succumbing to profit taking.
Markets also suffered from mixed economic news with March inflation data for Spain and Switzerland more than twice analysts' expectations as the recent rise in oil prices starts to filter through.
London stocks took heart from the latest survey of business confidence by the British Chambers of Commerce and strong retail sales which indicate that the weak economy is bottoming out.
London's blue-chips lost much of the morning gains generated by Buffett's intervention. British Airways [LSE;BAY], retailer Marks & Spencer (MKS), Vodafone [LSE;VOD] and Zurich Re were among those gaining on speculation that they were Buffett's chosen target.
Shares in gases group BOC [LSE;BOC] climbed 5.9 percent to 1,051 pence on the cyclical revival.
BP Amoco (BPA) rose on the move into cyclical stocks and its assertion that it would wring extra savings from recent merger activity.
In Frankfurt, the fallout from Deutsche Telekom's (FDTK) tepid earnings growth canceled gains in the cyclical sector and dragged the stock down 3.24 to 38.10 euros.
Engineering group Linde was among the highest climbers on the day, rising 10.9 euros to 582 euros after announcing a share buyback.
In Paris, France Telecom (FDTE) suffered from the Deutsche Telecom figures and its partner's announcement that long-distance revenues were under pressure. STMI (PSGS), another telecom firm, suffered from profit taking in the sector and fell 5.75 percent to 98.40 euros.
The biggest gainer was Air Liquide (PAI) as the world's largest industrial gas group announced a 9 percent rise in 19998 profits to 516 million euros. Its shares climbed 6.24 percent to 149.8 euros.
The construction group Lafarge (PLG) rose 1.5 percent to 95 euros after reaching a deal to buy New Mexico-based Corn Construction.
The Zurich market was dragged down by the performance of pharmaceutical and chemicals stocks on speculation that the country's major players were missing out on merger activity in the sector.
Roche dropped 340 to 17,640 Swiss francs and Ciba fell 4.25 to 120.75 Swiss francs. SAir Group stock also lost ground, slipping 8.50 to 330 Swiss francs after warning that the airline industry was suffering a worse-than-expected first quarter.
-- from staff and wire reports
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