Optimism over inflation sparks rally in bourses

European markets pushed ahead following the second low-key US inflation indicator in two days, but most were down on the week…

European markets pushed ahead following the second low-key US inflation indicator in two days, but most were down on the week and volumes remained modest.

Paris rose 1.1 per cent with the CAC-40 index adding 69.14 at 6,449.27 in a good session for technology stocks.

France Telecom rose €5.90 to €157.30 and Canal Plus €9 to €215. STMicroelectronics rose €4.15 or 6.1 per cent to €72.60 and Alcatel added €4.80 at €281.60.

Equant was the odd man out, sliding 6.4 per cent on persistent rumours that the network service provider was about to unveil a downbeat trading statement. The shares fell to €72.25 before closing off €5 at €72.90 in volume of 2.3 million shares.

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Frankfurt rallied for the second day running, but the Xetra DAX index, up 9.80 at 7,269.28, still ended 3.5 per cent lower on the week.

Tech leaders supplied good initial support but ran into selling towards the close. Siemens added €1 at €154.50 while Deutsche Telekom eased 10 cents to €65.10 after touching €67.09 earlier.

BMW, a strong market on broker optimism after the disposal of its loss-making Rover arm, was hit by profit-taking, slipping €1 to €33.

Concern that Preussag was set to announce a takeover move pushed the stock down 2.6 per cent or €1.15 to €43.50.

Amsterdam saw good demand for consumer staples and the AEX index pushed up 9.47 at 668.30.

Foods group Wessanen and brewer Heineken jumped more than 5 per cent. The former added 50 cents to €10.20 while talk of an imminent acquisition sent Heineken up €3.35 to €64.85.

Royal Dutch gained €1.34 at €67.64 and Philips put on €1.80 at €47.95.

Madrid was lifted by gains in Terra Networks after the Internet group said it was in alliance talks with US portals giant Lycos.