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London leads bourses up
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May 13, 1999: 12:44 p.m. ET
U.K. market gains 113 points as Dow bolsters Europe; Frankfurt, Zurich closed
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LONDON (CNNfn) - London led the way in Europe Thursday, with a strong opening on Wall Street giving a further boost to the markets as all the bourses that were open ended in the black.
Trading in Europe was limited, however, with several markets, including Frankfurt and Zurich, closed for Ascension Day. The Paris bourse is open, though it is also a public holiday in France.
The rosy picture across Europe came in stark contrast to Wednesday, when market sentiment suffered the double blow of the ouster of Russia's prime minister, Yevgeny Primakov, and the resignation in Washington of Treasury Secretary Robert Rubin.
London's FTSE 100 was the most active of those markets trading. The index of leading shares closed up 113.5 points at 6,456.6, a rise of 1.79 percent, bolstered by strong buying among pharmaceutical, telecom and insurance stocks.
Shares in Paris also made further gains in afternoon trading as the CAC 40, France's blue-chip index, ended up 61 points at 4,415.88.
Sentiment in Europe was bolstered by tame U.S. inflation data released Thursday, which should quell any worries about a possible hike in interest rates when the Federal Open Market Committee meets next week.
Italian and Spanish markets also ended the session in the plus column. The MIB 30 index in Milan added 254 points to 35,743, a rise of 0.72 percent. In Madrid the IBEX gained 90 points, or 0.89 percent, to 10,275.
London's three big drug stocks helped lift the market as they returned to favor. AstraZeneca (AZN) led the way as shares of the Anglo-Swedish company jumped 4.88 percent to 2,575 pence.
Glaxo Wellcome (GLXO) pared some of its earlier gains but still closed 2.5 percent up at 1,853 pence. Rival SmithKlineBeecham (SB) put in similar strong performance.
"It's a trading bounce," said analyst James McKean of Morgan Stanley. "These stocks have been dreadful (performers) for several months." McKean said a statement from industry leader Glaxo, due Monday, could give the sector a further boost.
Insurance stocks also had a good session, following strong first-quarter earnings Wednesday from CGU (CGU). CGU surged over 5 percent to 958 pence, and pulled rivals such as Legal & General (LGEN) and Sun Life & Provincial (SLP) in its wake. The latter put on 5.22 percent to end at 510 pence.
Telecom stocks also were strong, with British Telecommunications (BT.A) up 2.88 percent at 1,070 pence and Orange (ORA) up 3.21 percent at 897 pence.
U.K. technology stocks performed well after the Nasdaq composite finished the last session in positive territory and made further gains early Thursday. IT services group Sema (SEM) leapt over 6 percent to 570 pence, while rival Misys (MSY) fell just short of a 4 percent rise.
Supermarket operator Asda (ASSD) rolled out full-year earnings showing a 4.4 percent increase in pretax profit to 422.9 million pounds ($684.9 million). The stock was almost unchanged, as the company expanded on its planned merger with U.K. retailer Kingfisher (KGF).
Oil stocks rebounded in the afternoon Thursday after enduring strong selling pressures over the last session-and-a-half. BP Amoco (BP.A) added almost 2 percent to 1,093 pence and Shell (SHEL) was up 1.57 percent at 467 pence.
Analysts predicted the oil giants are likely to bounce back from recent losses as crude prices recover over the next week, perhaps to as high as $18 a barrel.
The market reacted cautiously to the announcement by Europe's largest venture capital firm, 3i [LSE:III], that it would return to the U.S. market to target the technology sector. The stock added 0.5 percent to 725 pence.
A quiet session in Paris was dominated by tech stocks as the performance of the Nasdaq bolstered confidence.
The session's stellar performer was chip maker STMicroelectronics (PSGS), which rocketed over 10 percent to close at 114.2 euros. The stock attracted strong interest after Goldman Sachs raised its share price target.
Electrical components manufacturer Schneider (PSU) also had a good session, to close 3.3 percent higher at 59.50 euros.
Investors also flocked to tire maker Michelin (PML), which put on 4.36 percent to close at 45.75 euros.
Drugs and chemicals company Rhône-Poulenc (PRPP) soared almost 5 percent in afternoon trading to end at 46.88 euros after the board of Kuwait Petroleum Corp., the largest shareholder in the French company's proposed partner Hoechst (FHOE), approved the revised merger plan Thursday. 
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