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Bourses lose steam
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August 16, 1999: 5:55 a.m. ET
Major markets give up early small gains as media, gas deals fail to enthuse
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LONDON (CNNfn) - European markets drifted lower by mid-morning Monday, unable to build up a head of steam despite deals in the media and gas sectors and a brighter outlook for global interest rates following last week's benign U.S. inflation data.
The FTSE 100 in London, Europe's leading financial index, gave up opening gains to slip 0.2 percent to 6,233.3, while the CAC 40 in Paris also gave up an early gain, slipping about 10 points, or 0.22 percent, to 4,424.60.
The electronically-traded Xetra Dax in Frankfurt shed a 30 point opening gain to trade almost 0.3 percent lower at 5,204.57. The SMI in Zurich lost half a percent to 6,900.7.
The FTSE Eurotop 300, a broader index of the largest pan-European shares, turned down as well, dipping 2.74 points, or 0.21 percent, to 1,286.31 as gains in health and gas stocks were offset by losses in forestry and paper and mining shares.
U.S. markets were expected to open flat Monday after last week's strong close. S&P futures traded on Globex was down 1.20 points at 1,331.70 while fair value for the S&P 500 index, which takes interest costs and dividend payments into account, was quoted in London at 1,332.87.
The euro firmed a little in European trading, nudging back towards the $1.06 level following upbeat comments about the recovery in the region's economy from a member of the European Central Bank's governing council. The dollar lost almost a yen to 114.70 yen.
The 2 percent gains in Tokyo and Hong Kong lifted Standard Chartered (STAN) to the top of the FTSE ladder as the Asia-reliant bank gained 5.6 percent to 910 pence on the back of the region's rally Monday.
British Airways (BAY) failed to gain after unveiling a new round of cost savings Sunday which aims to trim $365 million from operating costs by axing 1,000 middle management jobs. BA has been the worst performer on the FTSE 100 over the past three months, losing 20 percent as weak revenues and overcapacity slashed profits.
BA stock was marginally higher at 392 pence Monday in London.
Retailer Kingfisher (KGF) remained in focus amid reports it may bid for Sweden's Elkjop, the largest electronics retailer in Scandinavia. Kingfisher, which lost out in the bid battle for fellow U.K. retailer Asda (ASSD) to Wal-Mart (WMT), already has a series of joint ventures in continental Europe.
Kingfisher shares gained 1.37 percent on the FTSE blue-chip index, while Asda slipped 0.1 percent to 219 pence.
With the earnings season winding down, media group WPP (WPP) unveiled a 19 percent climb in first-half pretax profits to 112.6 million pounds ($181 million). WPP shares added 1.53 percent to 598 pence.
The major media mover Monday was Dutch group VNU, which was up 2.4 percent, although off earlier gains of about 4 percent, after making a $2.7 billion bid for U.S. TV-ratings firm Nielsen Media Research.
German stocks were mixed as investors reacted to corporate news while maintaining an eye on the influential Ifo survey of business confidence for July, which will be released Thursday. Wholesale prices were flat in July from the month before, and down 1.1 percent from a year ago.
Viag (FVIA), the conglomerate with mining and commodity interests, led the gainers with a 4.2 percent advance amid speculation that it may pitch itself into the M&A fray in the aluminum sector. The stock traded at 482 euros.
Linde (FLIN), the engineering group, was among the largest losers, shedding 2.6 percent to 63.60 euros after securing a majority stake in Sweden's AGA. Linde made a $3.7 billion cash bid for the gas group. AGA climbed 6 percent.
Commerzbank (FCCB), which surged Friday amid rumors it would make a bid for BhF bank, was 0.15 euros higher at 32.60 euros.
Dresdner Bank (FDRB) was off about 0.4 percent after posting first-half earnings in line with expectations and announcing a top priority was strengthening its North American investment banking activities.
In Paris, French banking regulators are due to rule on BNP's (PBNP) bids for Paribas (PPM) and Société Générale (PGLE) Tuesday. BNP's hostile bid won over a majority of Paribas shareholders but less than 40 percent of SocGen voting stock, leaving the final decision on control up to state regulators.
SocGen lost 0.42 percent after announcing that it was looking to cement alliances with other European banks. Paribas shed 3.3 percent and BNP gave up 2.85 percent.
--by staff and wire reports
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