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Europe recovers slightly
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March 14, 2000: 12:32 p.m. ET
Bourses stage a mini-revival, although advances are limited
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LONDON (CNNfn) - European markets breathed a sigh of relief Tuesday and made a modest recovery from the sharp falls suffered in the worldwide sell-off Monday.
Gains were modest, but the major market indicators closed in positive territory, except for Frankfurt, where the Dax index had a slight setback in late trading. Zurich was Europe's leading market, but across the region investors turned back to some of the "old economy" industrial stocks that have been out of favor recently.
At the close in Europe the major U.S. markets were solidly higher, lending support to a mini-revival that began in mid-morning. London's FTSE 100 closed up 20 points at 6,487.1, while Frankfurt's Xetra Dax eased 44 points to 7,650.35.
In Paris, the CAC 40 saw a revival by industrial blue chips that helped the index to a mediocre 13 point gain and a close at 6,350.35. In Zurich, the SMI advanced 0.8 percent to 6,838.2.
Sharp selling of technology stocks was most noted in Paris, although that's the European market that gained the most prior to Monday's correction. Media stocks remained out of favor in London as investors continued to ponder the sector's extended valuations.
In London, natural resources stocks came to the fore, with miners Billiton (BLT) and Rio Tinto (RIO) both gaining more than 6 percent.
Engineer Invensys (ISY) rebounded almost 8 percent, after mentioning the magic word "Microsoft". An alliance in e-friendly consumer appliances added the sparkle to the engineer's stock price.
Media firms Pearson (PSON), the owner of the Financial Times, and Reuters (RTR), headed down, exacerbating recent nervousness about the mismatch between prospects and valuations. Cable operator Telewest Communications (TWT) was the principal victim of a generally downbeat attitude in the telecom sector. The stock fell 6 percent, although broadband operator Energis (EGS) rocketed 8 percent higher on hopes for an increase in Internet usage on its network. Oil producer BP Amoco (BPA) slipped 2 percent after disclosing a $4.7 billion acquisition of lubricants maker Burmah Castrol (BMAH). Castrol rose by a quarter.
Hefty losses in the index's most heavily weighted company, Deutsche Telekom (FDTE), weighed on Frankfurt. Telekom fell more than 5 percent as investors in mainland Europe turned against the sector. Rival France Telecom (PFTE) fell almost 3 percent in Paris.
Although industrial firms such as truck maker MAN (FMAN), conglomerate Preussag [FSE:FPRS1] and merging utilities Veba (FVEB) and Viag (FVIA) enjoyed advances of more than 3 percent, they weren't enough to pull the index into the black. Auto stocks, overlooked recently, also made something of a comeback with BMW (FBMW) and DaimlerChrysler (FDCX) rising almost 3 percent.
In Paris, industrial firms really shone, against a negative showing by the technology and media firms that drove the market to a new high last week. Glass maker Saint Gobain (PSGO) led the way with an 8 percent gain' followed by beauty products seller L'Oréal (POR), hotel operator Accor (PAC) and food processor Danone (PBN).
Computer services supplier Cap Gemini (PCAP) dived 8 percent, while pay-TV operator Canal Plus (PAN) and its parent Vivendi (PEX) were close behind.
In Zurich, Alusuisse rose 2 percent on hopes its three-way aluminum merger with Alcan and Péchiney (PPEC) can be revived. Péchiney withdrew its merger application Tuesday in favor of reworking its proposal in a few weeks. Péchiney stock jumped 10 percent after the news. 
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