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Europe ends sharply down
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March 8, 2000: 1:09 p.m. ET
Late selling gathers pace on lack of Wall St. support, valuation worries
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LONDON (CNNfn) - A disappointing session for European markets turned nasty in the last hour of trading Wednesday, as investors responded to a perceived lack of support from Wall Street by sending European stocks sharply lower.
Bourses traded in negative territory all day Wednesday, as investors reappraised valuations for several key sectors, particularly technology and media stocks. Oil producers were the bright spot, with crude prices near 10-year highs.
The Dow Jones industrial average was 55 points higher at 9,850 when European markets closed Wednesday, although the U.S. index made a wobbly start following a sharp slide Tuesday.
London's blue-chip FTSE 100 dived 55 points, or 0.9 percent, to close at 6,411.2, while Frankfurt's electronically traded Xetra Dax slumped 100.59 to finish at 7,964.38. In Paris the CAC 40 fell 1.5 percent to close at 6,344.97, while Zurich's SMI fell an identical percentage to 6,945.5.
The FTSE Eurotop 300, a pan-European measure of blue chips, closed 0.9 percent lower, led lower by technology companies and consumer goods firms.
The European single currency suffered another lackluster day, standing at $0.9558 when European stocks ceased trading Wednesday, although off its lows for the session.
London blue chips were unsettled by a much-anticipated change to the benchmark FTSE 100 index, confirmed after the market close Wednesday. Nine companies will leave the index, to be replaced mainly by upstart "new economy" stocks. Those stocks ejected suffered sharp falls Wednesday in expectation of their expulsion, as index-tracking fund managers switched their weightings.
Investors showed a profound distaste for beer and spirits, with FTSE rejects Scottish & Newcastle (SCTN), Whitbread (WTB) and Allied Domecq (ALLD) all taking a beating. Plumbing supplies firm Wolseley (WLY) slumped 8 percent before its ouster.
Media shares also were in the wars, although for different reasons. Pay-TV firm BSkyB (BSY) and information supplier Reuters (RTR) tumbled 6 percent and 11 percent respectively, after French counterpart Canal Plus posted disappointing earnings late Tuesday.
Tech firms Sage (SGE), Misys (MSY) and Logica (LOG) suffered sharp drops as London investors backed out of the sector.
The highlight in London was BP Amoco (BP-A), which jumped 10 percent, and rival Shell Transport & Trading (SHEL), which advanced more than 6 percent, on brighter prospects for the oil sector.
Deutsche Bank (FDBK) and domestic rival Dresdner (FDRB) are expected to disclose a $31 billion merger Thursday, sparking strong gains for financial stocks in Frankfurt. The two protagonists had quiet sessions after strong gains Tuesday, but insurer Allianz (FALV), a key broker to the deal, surged 8 percent. The rest of the sector followed suit.
Tech firms Epcos (FEPC) and SAP (FSAP) led Frankfurt's decliners, both falling more than 4 percent.
Banks led the way lower in Paris, following disappointing earnings this week from Crédit Lyonnais (PCL) and BNP (PBNP). Lyonnais closed more than 6 percent lower, and BNP ended the session more than 2 percent into the red.
Europe's largest pay-TV operator, Canal Plus (PAN), paid the penalty for unveiling a greater-than-expected loss after the market closed Tuesday. The shares closed 4 percent lower Wednesday, although off their session lows.
Oil firm Total Fina (PFP) rose 6 percent, leading French blue chips, although computer consultant Cap Gemini (PCAP) closed 5 percent higher following the announcement of a joint venture with U.S. Internet giant Cisco Systems (CSCO: Research, Estimates).
In Zurich aluminum smelter Alusuisse fell almost 5 percent on rising fears its merger with France's Péchiney (PPEC) may run foul of antitrust concerns. Banker UBS was one of the few stocks to move higher in Switzerland, albeit only slightly. 
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