Paris soars as Internet alliance excites investors

Buying frenzy for media stocks sent Paris soaring, with the CAC 40 index closing up 173.44 to 5,946.86. Canal Plus surged another 21.2 per cent on its expected role as a key content provider in the new Internet alliance between its major shareholder Vivendi and UK company Vodafone AirTouch.

The Paris bourse set new trading limits for Canal Plus three times through the day. Speculation that it might join the EuroStoxx 50 index added further momentum and it closed at €232.70, a gain of €40.70. Vivendi itself gained €8.50 to €119 while Havas Advertising, of which Vivendi is the major shareholder, got a lift as well, rising €52.50 to €524.50, a rise of 11.1 per cent.

Conglomerate Lagardere experienced renewed enthusiasm from investors over its recent tie-up with Canal Plus, with analysts saying it would help unlock value in Lagardere's media businesses. It closed €2.50 higher at 385.

Several other companies with an Internet potential rallied too. High-tech equipment-maker Thomson Multimedia gained €11 to €92. Telecoms equipment-maker Alcatel, another potential Internet beneficiary, gained €12.80 to €220.80.

Thomson-CSF jumped 19.5 per cent or €7.40 to €45.40 on strong sales figures plus a report that the group is planning closer with Raytheon, the US defence giant.

Renault was a notable weak feature, sliding €4.45 or 8.5 per cent to €47.75. Cement leader Lafarge shed €2.00 to €86.

Coface, a credit insurer with e-commerce involvement, topped the day's big rises with a debut closing price of €86.50, up more than 60 per cent on its IPO price of €55.

Frankfurt rose 121.49 to 7,171.95 on the Xetra DAX index after overcoming a wobble for market heavyweight Deutsche Telekom.

Cyclicals were in demand. In chemicals, BASF and Bayer rose €2.98 to €45 and €1.75 to €41.80 respectively. Steel leader Thyssen Krupp added €1.61 at €327.70.

Deutsche Bank gained €3.49 at €82.39 but financials were mostly mixed reflecting interest rate uncertainties ahead of today's meeting of the European Central Bank monetary policy council.