Europe's stock markets put their interest rate-inspired rally on hold yesterday amid a welter of negative inflation data which hit the euro and sparked selective profit-taking in equities.
Deutsche Bank stepped up earnings forecasts for this year but held its 2002 estimates and reaffirmed concerns about tightening operating margins as new launch costs kick in. "We see little upside potential for the stock from here," it said. The shares, up 5.3 per cent in the preceding session, fell back 2.2 per cent to €40.51.
Metro, Europe's biggest retailer, had another uneasy session following a swathe of negative broker comment. Slack sales forecasts hit the stock on Thursday but yesterday the full extent of market disappointment became clearer when UBS Warburg and ABN Amro downgraded.
Oils fell as brokers grew more reflective following the completion of the first-quarter results season from the sector. Commerzbank remains cautious, suggesting that the industry's strong earnings momentum is about to turn. Royal Dutch shed 1.1 per cent at €66.97 and Total 1 per cent at €167.40.
Dresdner Bank, which is to be acquired by German insurance giant Allianz, rounded off a week of mixed fortunes for the banking sector, slipping 0.7 per cent to €50.86 on first-quarter results that fell short of broker expectations.
ABN Amro slipped 0.3 per cent to €22.33 following broker downgrades, among them a move to "add" from "buy" at Dresdner Kleinwort Wasserstein, which also cut earnings estimates for 2001 by 14 per cent. In contrast, Credit Lyonnais jumped 4.1 per cent to €43.52 as talk circulating in the market turned to the prospect of a mid-summer takeover bid.
Telecoms were weaker, with France Telecom down 2.7 per cent at €71.45, Telefonica down 2 per cent at €18.60 and Sonera down 2.9 per cent at €10.74.
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