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Europe ends strong
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February 17, 2000: 1:06 p.m. ET
Gains pared by Greenspan rate alert; chemicals, utilities, food lend support
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LONDON (CNNfn) - European stock markets ended a see-saw session on broadly higher ground Thursday, led by gains in long-overlooked stocks in the chemical, utilities and pharmaceutical sectors.
London shares advanced 1 percent, extending Wednesday's 2.4-percent rally, while Paris, Frankfurt and Zurich posted stronger showings.
Broader early gains were pared in late trading by interest rate comments by U.S. Federal Reserve Chairman Alan Greenspan that were perceived to be hawkish. The central bank chairman's testimony unraveled the advance posed by tame U.S. producer price data released earlier in the session.
The benchmark FTSE 100 ended up 61.9 points, or 1 percent, at 6,209, well off the day's highs, as solid corporate earnings offset the impact of Greenspan's comments. The index was up 81 points just before excerpts from Greenspan's testimony on Capitol Hill reached the market. During the session the FTSE 100 swung between a loss of 44 points and a gain of 114 points.
The blue-chip CAC 40 in Paris finished 108.69 points, or 1.8 percent, higher at 6,154.96, supported by buoyancy in media, telecom and banking stocks driven in part by Internet-related fervor. The index ended well off its session high of 6,222.87, achieved shortly after the release of the U.S. inflation data.
The electronically traded Xetra Dax in Frankfurt advanced 1.2 percent to 7,580.53, a gain of 90.21 points, while the SMI in Zurich closed up 1.4 percent at 7,029.4, bolstered by a surge in drug maker Novartis in a positive response to its earnings report. The AEX in Amsterdam finished up 1.1 percent at 667.97, while the blue chip indexes in Milan and Madrid both posted gains of just under 1 percent.
The pan-European FTSE Eurotop 300 ended almost 1 percent higher at 1,557.79, with the health, water, tobacco, steel, life insurance and chemical segments leading the charge.
Rate concerns flared in the morning following the release of strong U.K. retail data and a better-than-expected jump in Germany's Ifo business climate index in January.
The euro was quoted at 98.55 cents late Thursday, above session lows just below 98.40 cents. Some dealers believe a monetary tightening in the United States could buoy the dollar, the euro's archrival.
Halifax rockets on Internet plans
In London, a strong blue chip performance was underpinned by a 3 percent run-up in index heavyweight Vodafone AirTouch (VOD) and a supporting rally by Halifax (HFX), Britain's largest mortgage bank, which outshone all its FTSE 100 peers. Halifax rocketed 21.4 percent after disclosing plans to invest 150 million pounds ($240 million) in an online insurance service for homeowners and motorists. Market No. 2 Abbey National (ANL) also basked in the Internet limelight, leaping 7.2 percent after reporting 1999 earnings in line with forecasts and unveiling cahoot, its new Internet bank. Abbey said it will double its investment in e-commerce and other new business initiatives to 200 million pounds.
Defensive stocks also performed well. Cadbury Schweppes (CBRY), a soft drinks and candy maker, jumped 10.2 percent after buoyant 1999 earnings released Wednesday. Associated British Foods (ABF) spurted 15.8 percent, brewer Whitbread (WTB) advanced 8.5 percent, and British American Tobacco (BATS) stormed up 9.4 percent. United Utilities (UU) jumped 5.5 percent, while British Gas (BG) advanced 6.2 percent.
In Frankfurt, Deutsche Telekom (FDTE) rose 2.4 percent, to 87 euros, after agreeing on a share swap and alliance between its T-Online Internet access provider and Comdirect, the online banking arm of Commerzbank (FCMB). Shares of the Frankfurt-based bank gained 7.7 percent.
Other financial stocks lost ground amid interest-rate jitters. Deutsche Bank (FDBK), HypoVereinsbank (FHVM) and Dresdner Bank (FDRB), the country's three largest quoted banks, slipped 1.2 percent, 1.4 percent and 0.9 percent, respectively. Among other financial-sector issues, Allianz (FALV), Germany's largest insurer, fell 4.1 percent, while Munich Re gave up 2.7 percent.
Firm gains by retailers also shored up the blue chip advance, with Metro (FMEO) gaining 4.6 percent and Karstadt Quelle (FKAR) up 3.6 percent. Airline Lufthansa soared 5.8 percent, helped by a rating upgrade from Goldman Sachs to "outperformer" from "market performer".
In Paris, Banque National de Paris (PBNP) buoyed the market with a rise of 6.2 percent amid speculation it may be the target of a bid and on hopes for an Internet banking alliance. Rival Société Générale (PGLE) closed up 2.6 percent.
Pay-TV broadcaster Canal Plus (PAN) bounced 9.6 percent, while conglomerate company Lagardère (PMMB) shot up 7.7 percent, rebounding from a loss of nearly 6 percent Wednesday.
American depositary receipts of Wavecom (WVCM: Research, Estimates), a French wireless phone technology company, soared 34 percent in New York after the company said it had signed a contract with Japanese electronics firm NEC Corp. to develop a mobile phone based on Wavecom's digital Wireless Standard Modules.
In Zurich, drug maker Novartis, the most heavily weighted component in the SMI, rose 4.4 percent to 2,150 Swiss francs after the company reported better-than-expected 1999 profits.
In Amsterdam, Philips Electronics ended off 0.2 percent at 168.1 euros following a suspension for most of the session attributed to technical problems. Shares of Europe's largest consumer electronics manufacturer had opened up 5.6 percent after beating expectations with a tripling in 1999 earnings.
Business software publisher Baan tumbled 14 percent to 6 euros after the Amsterdam Stock Exchange gave the company four weeks to demonstrate its weakened finances would not push its net asset value into negative territory, or face being removed from the AEX index. 
-- from staff and wire reports
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