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FTSE closes at new record
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December 29, 1999: 1:36 p.m. ET
BT helps London index sets third straight mark; Frankfurt dip ends streak
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LONDON (CNNfn) - London blue chip stocks rallied to their third-straight record close Wednesday, buoyed by sharp gains for index heavyweight British Telecommunications and a positive start on Wall Street.
Frankfurt closed marginally lower, ending ten straight sessions of record high closes, amid doubts over a proposed tax reform. Paris and Zurich posted mild gains amid paper-thin volumes.
Thursday is the last trading day of the year for all European markets, with all exchanges closed Friday for New Year’s Eve.
The lighter-than-usual trading activity prompted some sharper-than-usual swings in leading issues. Most investment managers have already closed their books on the year and are waiting until after the start of 2000 to get back into markets.
After a four-day holiday break, London’s FTSE 100 picked up its rally where it left off Friday, ending up 0.4 percent, or 29.4 points, at 6,835.9, surpassing the Christmas Eve record close of 6,806.5. The FTSE rose to an all-time intra-day high of 6,860.8.
The electronically traded Xetra Dax in Frankfurt finished 1.96 points lower at 6,859.58, backing off the record set Tuesday, as doubts intensified about a proposed government reform to scrap a tax corporations pay on sales of cross-shareholdings
The CAC 40 in Paris climbed 10.67 points to 5,837.75, while the SMI in Zurich gained 0.6 percent to reach 7,488.7.
The FTSE Eurotop 300, a broader measure of the largest pan-European stocks, advanced 0.6 percent to 1,562.50.
Benchmark crude oil flirted with nine-month highs Wednesday amid new data showing a 3.2 million-barrel decline in U.S. crude stockpiles, exceeding expectations of a decline of 3 million barrels. Oil futures finished Wednesday at $25.40 a barrel, up 19 cents from Tuesday’s close, after slipping back from $25.90 earlier in the session. In mid-December, oil prices hit a post-Gulf War high of $26.15.
In currency markets, the euro suffered erosion against the dollar amid low trading volumes. The common currency dipped to around $1.0040, off earlier levels of just under $1.01.
In London, British Telecommunications (BT-A) contributed a large portion of the blue chip upside with a 4.6 percent jump on volume of seven million shares. The stock ended at 1,490 pence, off an all-time high of 1,510 pence achieved earlier in the session.
Insurer Royal & Sun Alliance (RSA) soared 11.5 percent following a weekend report in the British press of a possible bid approach from Anglo-Swiss rival Zurich Financial Services. Allied Zurich (AZN), Zurich Financial’s London-listed arm, ended flat at 2,555 pence. Rival insurer Norwich Union (NU) shed 1.9 percent.
Accounting software provider Sage Group (SGE) also lent strong support to the FTSE 100, leaping 7.1 percent. Retailer Kingfisher (KGF) rallied 5.2 percent amid reports of brisk business in the first two days of the post-Christmas sales period.
British American Tobacco (BAT) fell 0.7 percent, recovering from bigger losses in the wake of a Florida court ruling denying the appeal of a class-action decision against the industry.
Financial shares weighed on Frankfurt amid anxiety over whether proposed tax changes will ever make it into legislation. Banks are seen as potentially the biggest beneficiaries of the proposed reform, which could trigger a massive restructuring of Germany's corporate sector. Deutsche Bank (FDBK) shed 2.75 percent while Dresdner Bank (FDRB) gave up 0.2 percent.
Among telecom issues, Deutsche Telekom (FDTE) slipped 0.42 percent as rival Mannesmann (FMMN) eased 0.6 percent.
The Dax got some upward support from a 2.7 percent advance in DaimlerChrysler (FDCX) shares after the automaker reported a 12 percent rise in preliminary full-year sales Tuesday and issued an upbeat outlook for 2000.
In Paris, construction industry leader Lafarge (PLG) gained 2.4 percent amid expectations that it could see higher sales in the wake of a devastating storm that caused billions of dollars in damage across France. Sanofi-Synthélabo (PSQ) advanced 3.8 percent, while telecom equipment provider Alcatel (PCGE) gained 4.9 percent as investors foresaw a prominent role for the firm's equipment in helping rebuild French power and communications systems.
France Telecom (PFTE) wiped out losses to end up 0.2 percent.
Caterer Sodexho Alliance (PSW) fell 4.1 percent after its U.S. unit warned of increased cost pressures. The biggest loser of the day, pay-TV operator Canal Plus (PAN), slid 5.2 percent. 
-- from staff and wire reports
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