Bourses stall as sentiment slips

Wall Street's dull start combined with the weak euro injected a note of uncertainty into the European trading day. A number of markets rose to intra-day highs but fell back as the session progressed. The leading FTSE indices showed a mixed trend.

The FTSE Eurobloc 100 index eased 0.1 per cent at 1,223.79 while the FTSE Eurotop 100 index was virtually all square at 3,372.87. The FTSE Eurotop 300 index lost 0.3 per cent at 1,454.12.

Steel and mining were the day's two best sectors. Steel jumped 9.3 per cent thanks to a powerful run by its single component, the AngloDutch group Corus. Mining gained 3.1 per cent.

Paris marched up to another lifetime intra-session high before retreating to close down on the day. The CAC-40 index ended down 23.08 to 5,373.91, reversing early gains after a dull start to Wall Street and concerns that Paris valuations were too high.

The euro's decline towards lifetime lows against the dollar and yen added to nervousness, although analysts said the effect had been relatively minimal.

France Telecom was another major drag. The company lost €2.50 to €117.50, a fall of 2 per cent, after Lehman Brothers removed it from its recommended list.

Carrefour and Casino, the supermarket groups, lost ground on profit-taking. Carrefour fell €10.2 or 5 per cent to €176.7, while Casino surrendered €3.60 at €117. Hotel group Accor topped the percentage gainers on the CAC. Traders applauded the sale of its 50 per cent stake in Europcar, which they said would allow the group to focus on its core activity. The shares jumped 7 per cent or 14.90 to 226. Renault rebounded from its Nissan-inspired slump, rising 1.45 to 42.60.

Frankfurt unwound early gains to close with the Xetra Dax index down 69.19 or 1.2 per cent at 5,888.88.

Volkswagen, one of the day's heaviest casualties, came off €2.05 or 4.2 per cent at €46.55 on news it had bought out its French partner in the troubled Europcar car hire group.

Banks, hit lately by concern about the rescue operation for failed builder Philipp Holzmann, stayed out of favour. Deutsche Bank lost €1.24 at €65.12 and Dresdner €1.39 at €46.01. Elsewhere in financials insurers were also weak. Allianz shed €8.50 at €289.75 and Munich Re €4.30 at €211.30.