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Bourses get technical lift
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September 1, 1999: 12:58 p.m. ET
Europe ends mostly in black after correction; U.S. rate fears still lurk
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LONDON (CNNfn) - London blue chips capped a see-saw session half a percent higher Wednesday, reclaiming a small portion of the 130-point loss incurred the day before. Other major bourses staged slightly firmer rebounds amid a technical correction that did little to lessen persistent fears over the outlook for U.S. interest rates.
Market activity was subdued, however, ahead of U.S. jobless figures due out Friday. Those figures are likely to be closely scrutinized on both sides of the Atlantic after Tuesday's purchasing managers' survey in the United States raised concerns that the Federal Reserve may tighten credit further this year.
London's benchmark FTSE 100 finished up 0.48 percent at 6,276.2, a gain of 29.8 points, boosted by early gains on Wall Street and a perception that the 2 percent sell-off in Tuesday's session may not have been entirely justified. The Dow Jones industrial average was up 101 points when markets closed in London. The rally marked the Dow's first firm advance after four straight days of losses.
Advancers beat decliners by a seven-to-three margin in London. Volume was 968 million shares.
In Frankfurt, the electronic Xetra Dax closed up 0.88 percent, or 46.35 points, at 5,317.12, boosted by a confident start on Wall Street and signs that two of the country's leading utilities may be nearing final agreement on a merger. But local traders said the gains were tempered by nagging rate concerns.
Paris's CAC 40 closed up 0.96 percent at 4,633.38, near its session high of 4,634.03, after a modest rally underpinned by strength in oil and auto stocks. Zurich's SMI climbed 1.22 percent to end at 7,094.5.
The pan-European Eurotop 300 index, reflecting the relatively buoyant continental spirit, added 0.6 percent to 1,308.50, with strong gains in steel, diversified industry and leisure stocks more than offsetting losses in mining and life insurance issues.
The euro closed at around $1.0585, off its earlier foothold above the $1.06 level.
In London, a trio of index powerhouses helped pace the overall index advance. Oil producer BP Amoco (BPA) advanced 1.65 percent to 1,166 pence, while rival Shell Transport (SHEL) added 2.17 percent to 506 pence, supported by a recent rise in crude oil prices. British Telecommunications (BT.A) gained 1.36 percent to 965 pence.
Engineering stocks led the blue-chip charge, however, with GKN (GKN) sprinting up 3.67 percent after being rated a "strong buy" by SocGen. Invensys (ISYS) jumped 5.57 percent to the top of the FTSE 100 gainers' column after a round of upgrades.
Cadbury Schweppes (CBRY) advanced 3.88 percent after agreeing to buy Dr Pepper Bottling for $691 million in partnership with the Carlyle Group, a U.S.-based investment firm.
British Aerospace (BA) rose 2.15 percent after applying for an $800 million loan to support its share of the development cost of Airbus Industrie's planned 600-seat super-jumbo aircraft.
Drug maker SmithKline Beecham (SB) provided one of the biggest drags of the day on FTSE 100 index. The company's stock slid 2.34 percent as it strove to fend off rumors of possible side effects with its anti-diabetes drug, Avandia. SmithKline insisted Wednesday it was unaware of any health problems with the drug, launched in June in the United States. Rival U.K. drug maker, Glaxo Wellcome (GLXO), rose 1.28 percent.
In Frankfurt, the spotlight was centered on the utility and financial sectors.
Viag (FVIA) soared 7.96 percent after it was confirmed Tuesday that the group was in merger talks with rival Veba (FVEB), which climbed 4.2 percent.
RWE (FRWE) was 3 percent higher on a report the company is mulling the options for its 30 percent stake in German cellular operator E-Plus, including a sale of the holding.
Commerzbank (FCCW) jumped almost 4 percent despite denying reports that it could be the subject of a bid from Credit Suisse, whose own shares ended up 2.1 percent in Zurich. Drug maker Roche Holdings led the SMI with a 2.74 percent advance.
In Paris, the focus shifted from retailers to auto stocks as Peugeot (PGO) barreled up 4.37 percent and Renault (PRNO) jumped 2.06 percent following an upbeat assessment of domestic market sales. Renault is due out with interim results Thursday and analysts are anticipating a strong first-half operating performance.
Drug group Sanofi-Synthelabo (PSQ), the leading decliner in Paris, slumped 3.58 percent, after Elf Aquitaine (PAQ) said it would cut its stake in the firm from 35 to 20 percent to finance its hostile bid for rival TotalFina (PFP). Elf shares were 4.7 percent higher. Elf shares shot up more than 4 percent.
-- from staff and wire reports
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