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Europe ends on down note
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July 28, 1999: 12:24 p.m. ET
London regains momentum in thin trade, but Frankfurt flags and Paris sags
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LONDON (CNNfn) - European markets endured another volatile trading session Wednesday, though London and Frankfurt remained in the black while Paris ended down.
Early gains were pared by nervousness over Federal Reserve chairman Alan Greenspan's latest congressional testimony. An unexpectedly sharp drop on Wall Street jarred already fragile investor confidence.
The U.S. slide immediately wiped 10 points from London's benchmark FTSE 100 index, but it made strong gains in the last half hour to close up 34.6 points at 6,297.4, a gain of 0.55 percent. The index had earlier reached 6,318.0.
In Frankfurt, strong gains in banking and auto stocks helped the Xetra Dax stay in positive territory, with the index closing up 5.4 points, or 0.1 percent, at 5,229.56 after climbing to 5,274.33 in morning trading.
The CAC 40 shed all its early gains after the U.S. open to end the day off 12.1 points at 4,418.84, a loss of 0.27 percent. The index peaked earlier at 4,464.3 before a technical hitch closed the bourse for a short time.
The SMI in Zurich also lost ground, but hung on to close up 12.6 points at 6,830.5, a rise of 0.18 percent, but off its high of 6,919.0.
Amsterdam proved the most resilient continental market, ending the day up 0.86 percent at 556.18, but Madrid lost 1 percent and Milan gave up 0.12 percent.
The FTSE Eurotop 300 of the largest pan-European shares lost half its early gains to end up 3.9 points at 1,278.23.
The euro sagged again Wednesday as the yen continued to advance, though the Bank of Japan denied intervention. The single currency fell below $1.06 before recovering to around $1.0620.
London upped by drug makers
London had advanced on a mix of first-quarter earnings news and the legacy of recent corporate activity, but pharmaceutical and telecom stocks kept the index ahead after an afternoon sag.
Heavyweight drug stocks proved to be the most durable attractions. SmithKline Beecham (SB) rose 4.46 percent to lead the FTSE gainers after reaching a deal with the U.S. Treasury to negotiate with Cuban manufacturers of a new meningitis vaccine.
Glaxo Wellcome (GLX) advanced 4.11 percent advance after securing U.S. approval for its flu vaccine Relenza.
Satellite TV market leader BSkyB (BSY) rose 1.94 percent after a court ruling that its exclusive deal to screen live soccer matches didn't break competition law.
British Telecommunications (BT) added 1.43 percent ahead of its own results, due out Thursday. Securicor (SCR) which sold its 40 percent stake in cellular operator Cellnet to BT Tuesday, gained another 0.43 percent, having been 1.5 percent ahead at one point.
Other cellulars also did well, with Orange (ORA) ahead by 1.68 percent.
Cable operator Telewest (TWT), punished by investors after losing out in the race for the residential assets of rival CWC, bounced back with a 3.51 percent rise.
Drinks firm Cadbury Schweppes (CBRY) suffered a sharp reversal after reporting a 3.8 percent advance in first quarter profits. The stock initially gained 0.7 percent only to fall back 2.41 percent.
Insurer CGU (CGU) suffered a similar fate after announcing a 21 percent climb in new policy volume in its first quarter. A 0.77 percent gain turned into a 2.40 percent decline in afternoon trade.
British Steel (BS) suffered the heaviest fall as it closed down 4.14 percent as investors booked recent gains.
Banks and autos drive continent
In Frankfurt, earnings in the bank and auto sectors were at the fore. BMW (FBMW) closed up 0.65 percent after posting a 26.8 percent decline in first-half profit, but tempered the news with expectations of a "substantially improved" outlook in the second half.
BMW attributed the slump to restructuring costs at its troubled U.K. Rover plant, which the parent has spent billions of marks trying to resuscitate. Sales of Rover cars tumbled 33 percent, while overall BMW group sales climbed 3.3 percent.
Other auto stocks also advanced. Volkswagen (FVOW), Europe's largest automaker, closed up 0.3 percent. On Tuesday, Volkswagen gained 1.8 percent after reporting a mild 1.4 percent rise in first-half earnings late Monday. DaimlerChrysler rose 1.75 percent.
Deutsche Bank (FDBK) operating profits rose 19.2 percent rise in the first half, in line with expectations. Net income rose 45.1 percent to 1.8 billion euros and Deutsche stock ended up 0.5 percent.
Dresdner Bank (FDRB) added 2.75 percent while Commerzbank (FCBK) closed flat. Both are due to report first half results later this week.
Bank and auto stocks also boosted the CAC in Paris. Paribas (PPM) reported a 57 percent leap in first-half profits to a record 1.01 billion euros, boosting its shares by 1.9 percent.
Prospective merger partner Société Générale (PGLE) rose 0.5 percent as did BNP (PBNP), which aims to buy both banks.
However, auto maker Renault (PRNO) made the largest gains with an 8.3 percent advance after announcing a joint purchasing agreement with its Japanese partner Nissan.
Peugeot (PUG) was not far behind after beating analysts' expectations for first-half sales. The stock closed up 1.3 percent having shed much of a 4.5 percent rise.
Defense group Thomson-CSF (PHO) was the heaviest loser on the CAC, ending the day down 4.4 percent.
Drug group Rhone-Poulenc (PRRP) dipped 0.43 percent after a slide in second quarter net profits, though operating profit rose by 16 percent.
--from staff and wire reports
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