Tech rally drives Paris, Frankfurt regains poise

A rally for tech stocks sent Paris ahead, lifting the CAC 40 index 69.02 to 6,637.91 on a day of solid trading volumes.

There were sharp gains at computer services group Cap Gemini and telecoms equipment giant Alcatel following a combination of strong results and a broker upgrade backed by early gains for the Nasdaq. Cap Gemini jumped to €230 after turning in far stronger than expected first-half results. The shares closed €9.60 better at €219.50. Alcatel rose €6.10 to 89.90 after Deutsche Bank instigated coverage of the stock with a buy recommendation and a 100 target price.

France Telecom gained €2.60 to €129. Profit-taking sent Total Fina Elf down €4.20 at €175.80.

Frankfurt backed out of a four-day losing streak, rising steadily for most of the session on a rebound for the insurance sector and good demand for selected old economy favourites.

Allianz and Munich Re, weak lately on euro-led bond market concerns, rebounded. Allianz gained €1.71 to €376.01 and Munich Re €7.25 to €312.25. Among old economy leaders, BMW added 77 cents at €37.42 and retailer Metro 89 cents at €41.58.

Technology leaders tracked the strong opening on the Nasdaq. Deutsche Telekom added 89 cents at €43.20 and SAP €7.90 at €279.90. Siemens put on €4.25 at €179.74.

Amsterdam ended all square after a session which saw the AEX index swing within an arc of just seven points. It ended at 677.32, down 0.03. Sentiment pivoted on strong techs and weakness at a number of international stocks. ASM Lithography gained €1.86 at €42.84 and Philips rose €1.35 at €53.55.

The main checks to progress came from Royal Dutch, off €1.47 at €71.10 on profit-taking after its oil price-driven run of recent sessions, and Unilever which came off 80 cents at €50.85.

Milan was enlivened by a sharp rise in insurer Ras on renewed speculation that its German parent company was poised to launch an offer. By the close, the Italian group's shares were 5.3 per cent higher at €15.90, off an intraday record high of €16.01.

Preference shares in the Agnelli family holding company Ifil put on 3.9 per cent to €37.49 while 0.75 per cent of the capital in Ifil changed hands in a block trade. The two holding companies control Fiat.

The Mibtel index finished 193 higher at 32,905.