|
Bourses buckle on U.S. data
|
 |
May 14, 1999: 12:56 p.m. ET
Inflation report, prospect of interest rate rise send European markets lower
|
LONDON (CNNfn) - European markets finished the week on a bad note as a cozy end of week rally was rudely interrupted by disturbing U.S. inflation data, which sparked a major sell-off on Wall Street.
London's FTSE 100, which had moved in and out of the plus column in the morning, plummeted almost 200 points, or close to 3 percent, on the impact of the U.S. figures.
London's benchmark index recovered some ground, but still ended the session deep in the red, down 156.2 points at 6,300.4, a fall of 2.42 percent.
London's lowest close since the end of March left the FTSE down 3.8 percent for the week.
Continental bourses fared little better, with fears over a possible hike in U.S. interest rates when the Federal Open Market Committee meets Tuesday erasing mild gains made earlier in the session.
Germany's Xetra Dax reversed a 50-point gain to slump 1.25 percent to 5,183.49, a fall of almost 66 points from Wednesday's close; there was no trading Thursday due to a holiday. German blue chips have fallen 3.3 percent since last Friday.
France's CAC 40 bore the brunt of the selling on the Continent, but did regain some of its losses to close more than 2 percent lower at 4,323.83, a fall of 92 points. Friday's fall wiped out any gains for the week, as the CAC closed 1.9 percent lower over the last five sessions.
Switzerland's SMI ended the session 90 points lower at 7,071.1, leaving the index down 3.6 percent for the week.
A sharp rise in consumer prices during April, the biggest increase since 1990, unnerved U.S. investors -- and their anxiety over the likelihood of a rise in U.S. interest rates swiftly crossed the Atlantic.
The Dow Jones industrial average tumbled immediately at the open in New York, and continued falling to trade almost 200 points lower at 10,912.75.
There were isolated winners in London, as investors searched out recently overlooked stocks. Food and beverage company Cadbury-Schweppes (CBRY) closed up 1.35 percent at 829 pence, after the company said it had other plans if the sale of its non-U.S. beverage business to Coca-Cola (KO) is blocked by antitrust authorities.
Merging retailers Asda (ASSD) and Kingfisher (KGF) remained in favor as investors continued to weigh the benefits of their proposed deal. Asda closed 1.74 percent higher at 191 pence, while Kingfisher put on 1.27 percent to 856 pence.
Perennial favorite Vodafone (VOD), the cellular operator, also closed in the black, while telecom network operator Colt Telecom (CTM) ended the session as the biggest gainer, up 2.32 percent at 1,289 pence.
In contrast, telecom heavyweight British Telecommunications (BT.A), which had performed well all week, slumped 4 percent to 1,036.
The major casualty in London was fund manager Amvescap (AVZ), which lost 8.53 percent to 610 pence, as investors worried that the bull run was over.
Troubled retailer Marks & Spencer (MKS) regained some of its earlier losses, but still closed 3.32 percent lower at 393 pence on nervousness ahead of a full-year earnings announcement next Tuesday.
In Frankfurt, the biggest gainer was utility giant RWE (FRWE), which ended more than 3.42 percent higher at 46.75 euros on press reports that the company was planning a major restructuring.
The software company SAP [FSE:FSAP3] also bucked the trend, but ended well short of its session highs. The stock finished up a little more than 1 percent at 365 euros on improved sentiment toward technology stocks, following positive comments from IBM (IBM) Thursday. Siemens (FSIE) also posted a small rise.
In Paris, trading was dominated by another excellent session for computer maker Bull (PBUL). The stock continued its recent gains to close up almost 8.5 percent at 9.72 euros, having earlier been suspended when its gain reached a maximum allowed by the exchange. Speculation has centered on the sale of a 17 percent government stake in the company.
The biggest gainer among the blue chips was publishing-to-defense group Lagardere (PMME), which added over 4 percent to 39.51 euros, as investors sought out safe stocks.
The other principal winner was chip maker STMicroelectronics (PSGS), although it gave up most of its earlier gains to close up just 0.44 percent at 114.7 euros, as sentiment toward tech stocks improved.
France Telecom (PFTE) reversed earlier gains of almost 2 percent to end down almost 3.4 percent at 71.70 euros after the company reported positive first-quarter revenue numbers.
Financial stocks in Zurich, which had led the index higher early in the session, suffered amid fears of higher U.S. interest rates. Only the world's No. 1 watch maker Swatch and the engineering and energy company ABB ended in the black.
-- from staff and wire reports
|
|
|
|
|
 |
|
