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German shares at year high
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July 2, 1999: 1:11 p.m. ET
Firmer Dow, mixed job numbers in U.S. support bourses; Paris sets record
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LONDON (CNNfn) - European bourses ended mildly higher Friday after a mixed batch of U.S. jobs data allayed worries that further interest rate hikes may be in the offing. German shares shrugged off a sharp loss in carmaker Volkswagen to hit a new year high above 5,510.
Paris stocks also set a closing record, joining London and Frankfurt issues in taking comfort from a firmer Wall Street performance.
Paris' CAC 40 climbed 11.41 points, or one-quarter percent, to 4,620.67, capping five successive sessions of gains with an all-time closing high. The U.S. employment data helped lift Paris stocks out of some earlier doldrums. But bank stocks suffered sharp erosion amid uncertainty over the outcome of a three-waybidding battle. The blue chip index was up 4.6 percent for the week.
London's benchmark FTSE 100 inched up 3 points, or 0.05 percent, to 6,491.9, a day after rocketing 170 points in its largest one-day point gain in nearly six months. Stronger than anticipated payroll data in the United States was seen as taking some of the steam out of Thursday's buying binge in the wake of the Fed's quarter-point interest rate hike.
The benchmark U.K. gauge was up 0.88 percent for the week.
In Frankfurt, the electronic Xetra Dax rose 0.7 percent, or 38.83 points to 5,519.05 despite a big drop in carmaker Volkswagen amid a rating downgrade. The previous high of 5,509.30 was broken on a day when traders said signs of a German economic recovery were drawing money into the Dax. The Dax gained 4.1 percent from last Friday's close. Zurich's SMI ended up 114 points at 7,206.2.
European markets started slowly Friday following a sharp run-up Thursday, when investors cheered the Federal Reserve's reversion to a neutral rate stance. Friday's U.S. job numbers -- with a higher unemployment rate contrasting a stronger than expected increase in payrolls -- offset jitters caused by Thursday's strong purchasing managers' report
London was held back by investors cashing in gains in recent risers including British Telecom (BT.), which lost 0.63 percent, and drug giants Glaxo (GLXO) and SmithKline Beecham (GLX), which slid 1.51 percent and 2.08 percent, respectively.
Pub concern Whitbread (WTB) ended up 0.91 percent at 1,005 pence after raising its bid for the retail business of Allied Domecq (ALLD) to 2.88 billion pounds ($4.54 billion) in cash and shares to fend off a sweetened offer from Punch Taverns. Punch earlier upped its own bid to 2.85 billion pounds. Allied shares closed unchanged at 614 pence.
In Paris, Banque Nationale de Paris (PBNP), Société Générale (PGLE), and Paribas (PPM) suffered erosion Friday amid persistent doubts over the outcome of a drawn-out bidding battle that has pitted BNP against its two takeover targets. SocGen shares fell 4.8 percent Friday in Paris after Schroders investment bank downgraded the bank's share rating following its raised offer for Paribas. Paribas stock slid 3.6 percent, while BNP lost almost 4 percent.
Automakers posted robust gains Friday. Renault (PRNO) jumped 3.92 percent, to 44.00 euros, as it continued to restructure Japan's Nissan, while Peugeot S.A. (PUG) raced up 3.46 percent to 158.4 euros.
Supermarket group Casino (PCO) jumped 4.56 percent amid rumors of more consolidation in the retail sector. Electrical device and parts maker Legrand (PLR) headed the CAC 40 gainers list, leaping 5.62 percent to 212.3 euros.
In the U.K., investors drove shares of Scottish Power (SPW) up 7.8 percent as the company announced a share purchase plan. In the water sector, Thames Water (TW) added 3.51 percent to 1,053 pence and United Utilities (UU) shot up 3.21 percent, to 819 pence, as investors bought defensive plays.
Electronic retailer Dixons (DXNS) blazed a path through the tech sector after announcing plans earlier in the week to float shares in its pioneering free Internet-access service, Freeserve. Dixons shares advanced 3.34 percent to 1,331 as it continued its presentations to institutional investors for the planned IPO. The stock rocketed more than 8 percent Thursday.
Media and leisure group Granada (GAA) added 5.5 percent after a positive analysts' presentation, and publisher Emap (EMA) gained 4.97 percent on a strong day for media stocks.
Among banking stocks, HSBC (HSBA) provided a stellar performance, rising 4.18 percent following Asia's strong showing overnight.
In Frankfurt, Deutsche Telekom (FDTE) gained 0.40 euros to 40.80, while another index heavyweight, Deutsche Bank (FDBK) edged up 0.28 percent as Credit Suisse First Boston said it had called a truce in a poaching campaign for Deutsche's U.S. health-care team.
Volkswagen (FVOW) slid 3 percent, leading the blue chip decliners, after Deutsche Bank trimmed the company's rating. The carmaker posted a 23 percent leap in June U.S. sales Friday.
Chemical and steel stocks were also in vogue, with Bayer (FBAY) gained 0.62 euros to 41.55 while Thyssen Krupp (FTHY) rose 0.60 euros to 22.20.
--from staff and wire reports
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