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Bourses fall on China jitters
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July 16, 1999: 5:47 a.m. ET
Europe slides as China-Taiwan tension mounts, ahead of economic data
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LONDON (CNNfn) - European markets all fell in morning trade Friday as heightened tension between China and Taiwan unnerved investors, who also had the impact of the bias toward tighter euro-zone interest rates to digest.
In London, the FTSE 100 shed its early small gains to dip just inside the minus column, down 2.7 points at 6,572.3
Losses mounted elsewhere among European blue chips after a negative opening.
The CAC 40 in Paris was down 11.9 points, or 0.26 percent, at 4,653.77, while the Xetra Dax in Frankfurt was almost half a percent lower at 5,591.83.
In Zurich, the SMI was down 38.9 points, or 0.55 percent, at 7,073.6.
European investors gained little momentum from Thursday's advance of the Dow Jones industrial average, supported by a flat reading in the June consumer price index and rosy second-quarter earnings.
The Nasdaq and S&P 500 reached new records, but Wall Street was expected to open lower, with Globex S&P Futures trading at 1,416.30 versus a fair value quoted at 1,419.53.
Traders appeared unnerved by the mounting tension between China and Taiwan, which sent Asian markets skidding. In London, HSBC (HSBA), a London-based bank which has almost half its operation in Asia, was off more than 1 percent.
Investors were also holding out for more U.S. economic data, with industrial production figures for June due out later Friday.
The euro was steady at about $1.02 after ECB president Wim Duisenberg Thursday said the bank was beginning to entertain a tightening bias towards interest rates and gave an upbeat assessment for European economic growth for the rest of the year.
Telecom activity was the center of attention Europe again Friday. In London, the prospect of rival bids for assets of Cable & Wireless Communications (CWZ) lifted its shares just 0.68 percent to 725 pence. Its majority owner and the second largest U.K. telecom operator, Cable & Wireless (CW.) was up just 0.3 percent.
Telewest (TWT), the U.K's largest cable firm, recovered some of its earlier losses to trade down 1.3 percent as it faces a bid battle with market number two NTL. France Telecom (PFTE) confirmed that it would pay about $1 billion for a 10 percent stake in NTL to back a bid for CWC. The French firm's stock dipped 0.5 percent.
In Frankfurt, Deutsche Telekom, pared its earlier gains, to trade just 0.5 percent higher at 40.60 euros after denials that it is in merger talks with Spain's Telefónica, which extended its modest gains to trade almost 0.6 percent higher at 47.76 euros.
Back in London, shares in brewer Bass (BASS) was up 0.54 percent after Whitbread (WTB) withdrew its bid for Allied Domecq's (ALLD), paving the way for Punch Taverns to proceed with its rival $4.5 billion bid, supported by Bass. Allied was off 0.3 percent, while Whitbread was unchanged.
Oil giant BP Amoco (BPA) basked in the glow of a positive reception to its restructuring plans, although it fell back slightly from its latest life-time high of 1,299 pence to trade 0.6 percent higher.
German chemical giant Hoechst (FHOE) was almost 1 percent lower, having shed some of its earlier losses, as shareholders reconvened to vote on its planned merger with France's Rhône-Poulenc (PRHP), whose shares fell further to trade down 0.6 percent.
--from staff and wire reports
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