Bourses climb as US data reassure investors

Bourses picked up after a muted start as the day's US producer prices data offered investors renewed reassurance on the outlook for interest rates.

The FTSE Eurobloc 100 index closed 9.61 higher at 1,120.50. The FTSE Eurotop 100 put on 7.18 to 3,048.76 while the broader FTSE Eurotop 300 settled 2.19 ahead at 1,336.19.

Frankfurt rose 47.09 to 5,483.95 on the Xetra DAX index, for a five-day gain of 2.7 per cent. Viag pushed higher on hopes for a rapid conclusion to merger talks with fellow utility Veba after a report Veba had offered the state of Bavaria a price 10 per cent above market value for its 25.1 per cent stake in Viag.

Viag gained 64 cents or 3.1 per cent to €21.32 while Veba eased €1.14 at €56.95. DaimlerChrysler added 65 cents at €72.65 after the carmaker announced that merger-synergy savings this year in its distribution arm would be more than anticipated. In a strong chemicals sector, Hoechst jumped €1.96 or 4.9 per cent to €41.09 on dividend news. BASF added 66 cents and Degussa Huels 54 cents at €36.30.

The uptick for the dollar helped lift Lufthansa, sending shares in the airline up 45 cents at €18.81.

Paris posted a second successive record closing high, lifted by the strength of the two oil groups locked in a bitter takeover battle. The CAC40 index ended 28.06 or 0.6 per cent higher at 4,745.48. TotalFina and Elf Aquitaine, the two oil groups that are trying to take each other over, both climbed in heavy volume on speculation that further bids could be on the cards. Total rose €3.10 or 2.4 per cent to €130, while Elf advanced €4.80 or 2.7 per cent to €180.80.

Michelin, the tyremaker, fell on profit-taking after soaring 12.6 per cent on Thursday on a big rise in profits and a plan to cut staff. The shares ended €1.35 or 2.8 per cent down at €46.40. Amsterdam rose 4.27 to 591.67 on the AEX index following a 5.1 per cent advance for Philips, the electronics giant. Philips rose €5 to €104, helped by an upgrade to "strong buy" at Deutsche Bank as sentiment towards technology-related stocks stayed strong.