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Europe mired in red
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October 15, 1999: 1:20 p.m. ET
London, Zurich biggest losers on U.S. inflation data; declines ease at close
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LONDON (CNNfn) - London and Swiss blue chips suffered the most Friday as European markets closed deep in the red, knocked by strong U.S. inflation data.
Bourses reversed some of their heavier losses as selling pressure eased on Wall Street before the close in Europe. But the poor session in Europe left all four major bourses nursing losses of more than 4 percent over the last week.
The FTSE 100 fell 2.2 percent to close down 132 points to 5,907.3, its biggest one-day fall in two months. The sharp decline left the index down 4.7 percent on the week. London blue chips recovered from a 3 percent loss earlier in the session.
Zurich's SMI fared even worse Friday as it closed 2.4 percent lower at 6,787.2, a loss of 166 points. Over the last five trading days, Swiss blue chips have lost 4.3 percent of their value.
German blue chips showed the most resilience. Frankfurt's electronic Xetra Dax recovered from a loss of more than 2 percent to close just 0.7 percent lower at 5,184.23, a fall of 36 points. The index still fell 4.3 percent over the past week.
In Paris, the CAC 40 also recovered late in the day -- but still lost 59 points, or 1.3 percent, to end at 4,524.42. French blue chips shed 4.2 percent over the last week.
The markets took a sharp downturn Friday after the release of stronger-than-expected U.S. producer price data. The mood of investors was already glum after U.S. Federal Reserve chairman Alan Greenspan's comments late Thursday about a potential burst in the U.S. equity bubble.
Bourses pared some of their losses late in trading, as U.S. blue chips halted their slide and buyers returned. The Dow Jones industrial average was around 134 points lower as Europe's trading day came to an end, having fallen more than 200 points in early trade.
The FTSE Eurotop 300, a gauge of the largest pan-European stocks, reflected the minor recovery across the Continent, ending 1.8 percent lower at 1,256.18.
In currency markets, the dollar endured a difficult day. The euro surged briefly through the $1.09 barrier to its highest level in 7 months, before falling back to trade around the $1.088 level. The British pound broke through $1.67, before falling slightly to trade around $1.6691.
In London, less than a fifth of the top 100 stocks managed gains. Soft drink producer Cadbury Schweppes (CBRY) led the way with a rise of 3.9 percent, while insurer Legal & General (LGEN) jumped 3.2 percent.
Railtrack (RTK) closed 2.9 percent higher after the operator of Britain's rail network said it was close to an agreement with the government to run part of the London subway system. The stock has suffered recently in the wake of the London train disaster earlier this month.
The two other U.K. transport blue chips also enjoyed a strong session, after recent turbulence, with British Airways (BAY) up 3 percent and airport operator BAA (BAA) up 1.8 percent.
Most leading stocks were sharply lower. Lloyds TSB (LLOY) slumped 5.7 percent, while rival bank HSBC (HSBE) fell 3.3 percent.
Other financial stocks also suffered as they took the brunt of the interest rate fears. Bank of Scotland (BSCT) shed 5 percent after announcing its formal offer for National Westminster Bank (NWB), whose shares fell 5.3 percent.
British Telecommunications (BTA) was also weak as it fell 3.6 percent. Oil leader BPAmoco (BPA) slipped 2.8 percent and Shell (SHEL) dropped 2 percent.
The alcoholic beverage sector suffered from investor pessimism. Scottish & Newcastle (SCTN) fell 5.8 percent, while newcomer South African Breweries (SAB) shed 5.2 percent. Diageo (DGE), the world's largest beverage producer, closed 3.9 percent lower.
Aircraft engine maker Rolls-Royce (RR) was the biggest loser in London, slumping more than 6 percent. Investors continued to focus on the fallout of the mega-merger between France's Aérospatiale-Matra and Germany's DaimlerChrysler Aerospace to create the world's third-ranked aerospace and defense giant.
British Aerospace (BA) stock closed almost 1 percent higher, rebounding from a sharp slide Thursday on concern that it would miss out on restructuring in the European defense sector.
The aerospace sector weakened sentiment in Paris after a jump Thursday. Aérospatiale-Matra lost 2.7 percent while its merger partner, DaimlerChrysler Aerospace (FDCX), fell 1.2 percent in Frankfurt.
Lagardère (PMMB), which owns a 33 percent stake in Aérospatiale, lost 1.6 percent, while defense systems maker Thomson-CSF (PHO) softened 1.5 percent.
Automaker Renault (PRNO) was one of the few gainers among Paris blue chips, rising 2 percent.
Sodexho Alliance ended unchanged after announcing a sharp jump in full-year sales.
Retailer Pinault Printemps Redoute (PPP) closed 1 percent lower after unveiling a bid for the 42.8 percent of office equipment supplier Guilbert it doesn't already own.
Vivendi (PEX) was down 1.8 percent as speculation grows that it is seeking to merge its French pay-TV interests with those of Britain's BSkyB (BSY).
Telecom equipment manufacturer Alcatel (PCGE) was the biggest loser in Paris as it slumped 3.9 percent. Oil producer Total Fina (PFP) lost 3 percent.
In Frankfurt, healthcare company Fresenius Medical (FFRE) led a small band of gainers as it jumped 4.8 percent, while retailing giant Karstadt (FKAR) was not far behind with a 4.6 percent advance.
BMW (FBMW) almost managed to close more than 1.3 percent higher amid reports that it hasn't ruled out selling the non-core assets of its troubled U.K. Rover subsidiary. BMW is expected to launch a major review of its Rover subsidiary Friday, according to a published report.
Dresdner Bank (FDRB) was the worst hit of the financial stocks as it plummeted 4.1 percent.
Financials also weighed on Zurich. Credit Suisse was the biggest loser on the SMI with a 3.7 percent drop, while UBS fell 3.1 percent.
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