|
London snaps streak
|
 |
April 29, 1999: 2:51 p.m. ET
Europe's bourses end broadly lower as 1Q earnings jitters roil markets
|
LONDON (CNNfn) - London's leading index snapped a five-day winning streak Thursday, surrendering 101.2 points as investors scrambled to cash in on recent rallies. Bourses across the continent suffered similar hiccups, as poor earnings results eroded confidence despite strength on the Dow Jones industrial average.
A day after posting its second successive record close, the FTSE 100 succumbed to a sharp sell-off in the drug sector that mirrored similar losses in Wall Street's previous session. By the close, the FTSE 100 index had shed 1.5 percent of its value to 6,497.6 more than 2 percent below its intraday high of 6,635 scored Tuesday.
The rush to lock in gains ended up lopping off sizable chunks of pharmaceutical giant Glaxo Wellcome(GLXO), which tumbled 4.4 percent to close at 1,936 pence, and newly merged rival AstraZeneca(AZN), which shed 4.1 percent to finish at 2,432.
Retailers also were weak while miners such as Billiton(BLT) rocketed 8.82 percent.
The downturn in London resonated across continental Europe, where markets had begun the day lower after a choppy session in Asia undermined the impact of another record for the Dow.
Germany's electronically-traded Xetra Dax slid 0.55 percent, or 29 points, to 5,323.06 points, pulled down by poorly received first-quarter earnings results from national airline Lufthansa(FLHA). The carrier reported a drop in income from ordinary activities from 163 million marks to 62 million marks. Lufthansa shares gave up more than 3 percent in Frankfurt.
Two chemical giants -- Hoechst (FHOE) and BASF (FBAS) -- also took hits from tepid results. Frankfurt-based Hoechst saw its shares fall 1.10 euros to 42.85 after it reported a 64 percent slump in after-tax profit to 52 million euros. BASF shares recouped some earlier losses to close off 0.15 euros at 42.10 as investors reacted to a fall in net profit of 22 percent, to 323 million marks.
Zurich's SMI index shed 0.76 percent, or 56 points, to end at 7,304.6 as technical selling kicked in. Drug powerhouse Novartis continued to slide, dropping 30 Swiss francs to 2,225 as rival Roche skid 230 francs to 17,955.
French shares gave up 3 points, or 0.07 percent, to 4,371.53 on the CAC 40 a day marked by strong performances by oil giants Elf Aquitaine (PAQ) and Total (PFP) spurred by a jump in Brent crude oil prices.
But electrical equipment giant Alcatel (PCGE) shed 2.35 percent to 116.6 euros, despite a first-quarter earnings report showing 10 percent growth in telecom revenue and a 4.4 percent rise in overall sales. Investors reacted negatively to Alcatel's warning of a first-half drop in telecom earnings.
Tire maker Michelin (PML) fell 4.8 percent to 43.30 after posting a 1 percent rise in first-quarter revenue to 3.13 billion euros that failed to inspire the market.
In London, First Choice (FCD), the U.K.'s third-largest tour operator, rose 3.1 percent to 100.4 pence after its second-ranked rival, Airtours (AIR), launched a long-awaited bid for the company in a move likely to spur a shake-out in the European package holiday sector. Airtours shares slid 6.2 percent to 447 pence.
A successful takeover would catapult Airtours into first place in the U.K. travel-tour market, ahead of current leader Thomson Travel (TRV).
Anglo-Dutch consumer products group Unilever (ULVR) will come under scrutiny after releasing first-quarter earnings. Net profit fell just under 1 percent to 422 million pounds. Unilever shares eased 4.9 percent to 557 pence.
Beverage giant Allied Domecq (ALLD) slid 6.67 percent to 480 pence after posting half-year earnings. The group reported pretax earnings of 292 million pounds, down from 320 million last time.
Kingfisher (KGF) and Asda (ASSD) shares are likely to come under the spotlight after the world's biggest retailer, Wal-Mart (WMT), said it has no interest in entering the U.K. market, the Financial Times reported. Kingfisher bid $10 billion for the supermarket chain last week but there had been speculation Wal-Mart might launch a competing offer.
Kingfisher stock was off more than 1 percent, while Asda shares shed almost 2 percent.
Shares of United News and Media (UNWS) surged 7.28 percent to 718 pence after the British group agreed to buy New York-based CMP Media in a $920 million deal that will strengthen its position in high-tech print and online publishing aimed at businesses.
United said the company created by merging its Miller Freeman unit with CMP's web subsidiary, CMPNet, will be ideally positioned to profit from booming growth in the U.S. Internet market.
British American Tobacco(BATS) spiked 8.5 percent after the company reported a 10 percent first-quarter slump in operating profit but predicted a recovery in Brazil and Asia markets.
In the auto sector, Swedish truck maker Volvo said it had raised its stake in rival Scania to 13.8 percent from 13 percent, using proceeds from the recent $6.45 billion sale of its car unit to Ford Motor Co. to help finance the purchase. Investor, which controls a 45 percent interest in Scania, has adamantly objected to Volvo's moves. 
-- from staff and wire reports
|
|
|
|
|
 |
|
