European markets stayed firm in spite of early weakness on Wall Street in the wake of the overnight rise in US interest rates.
The euro moved ahead in foreign exchanges and bonds were steady. The mood mostly reflected the removal of uncertainty surrounding Federal Reserve monetary policy. At the close of trading, the FTSE Eurobloc 100 index was up 1.5 per cent at 1,105.80. The FTSE Eurotop 100 index gained 1 per cent at 3,051.87 and the broader FTSE Eurotop 300 index added 1 per cent at 1,326.90.
Frankfurt duly shared in the upbeat mood, gaining ground for the fourth day running with a rise of 76.30 at 5,400.32 on the Xetra DAX index.
Much of the day's gloss was supplied by the telecoms sector, with both Deutsche Telekom, the market heavy weight, and Mannesmann turning in strong performances. Better-than-expected first-half results allowed brokers to take a more positive stance on the outlook for the full year at Deutsche Telekom. There was also the promise of further acquisition from the company. The stock closed up €2.51 or 6.5 per cent at €40.86.
Mannesmann jumped €5.38 or 3.8 per cent to €147.88 on positive broker comment and after the company successfully laid the ghost of rights issue rumours. A conference call led analysts to believe that the likelihood of an equity financing from Mannesmann, which has been pursuing a high-profile acquisition drive this year, had fallen close to zero.
Metro was a weak market after the retailer's first-half results statement suggested slack sales growth. The shares lost €3.26 at €51. Karstadt by comparison added €4.00 at €461.
Paris drove up 2 per cent with the CAC 40 index gaining 88.83 at 4,629.23 to close within six points of the session peak.
Driven by the recent gains for their US counterparts, tech shares spurted. Equant gained €4.05 to €84.50 and STMicroelectronics €1.70 at €69.80. CCF met with a fresh burst of takeover-inspired buying, rising €2.50 to €119 on a widely-held understanding that one or other of its core shareholders, which include Dutch financial giant ING, was teeing up a bid. Schneider bounced €2.80 to €64.80 after Lehman Brothers turned increasingly positive on the electrical engineer ahead of full half-year figures on September 8th.
Foods services group Sodexho Alliance was the day's top performer, adding €11.10 or 7.6 per cent at €158.20.
BNP, Paribas and Societe Generale stayed active as investors speculated on the eventual outcome of their three-way takeover tussle.
SG rose €6.10 to €195.50 after confirming it would relinquish its 26 per cent stake in Paribas. BNP, which hopes to buy both banks, came off 90 cents at €76.20.
