Allianz fails to avert Frankfurt fall

The strength of the Japanese yen depressed European bourses, adding to worries about US interest rates. The FTSE Eurobloc 100 index dipped 9.92, or 0.9 per cent, to 1,093.01. The Eurotop 100 dropped 20.12, or 0.7 per cent, to 2,964.71, while the Eurotop 300 closed 9.88, or 0.8 per cent, lower at 1,303.11.

Frankfurt fell 1.5 per cent in spite of sharp gains in Allianz on rumours that the insurer planned a shopping spree and to restructure its holdings. The Xetra DAX index fell 82.76 to 5,304.42.

Allianz dominated the day's trade, shooting up €15, or 5.9 per cent, to €268 amid speculation that its new arrival from Goldman Sachs, Mr Paul Achleitner, could implement a wide-ranging restructuring of the insurer's holdings, and might dispose of its near 21 per cent stake in Dresdner Bank to forge a cross-border alliance. Dresdner Bank put on 95 cents to €44.65, while Deutsche Bank gave up 25 cents to €64.15 as it unveiled plans to expand its asset management business.

The motor sector remained in focus. DaimlerChrysler gave up another €3.35 to €67.50 as the company cautioned that $1.4 billion (€1.36 billion) from merger synergies in 1999 would be eroded by cost pressures at Chrysler and losses at its Smart car business. Paris ended lower despite a strong performance by several financial stocks. The CAC-40 index fell 21.47 to 4,640.55. Societe Generale, the bank, was the centre of attention after speculation linking it to its rival Dexia or AGF, the insurer. SocGen climbed €3 , or 4.8 per cent, to €133.50, while AGF finished €1.60 up at €50.50.

Zurich was lower in line with its neighbours and under pressure from today's Eurex expiry. The SMI index finished down 63.1 at 6,985.

Amsterdam fell on heavy selling of technology stocks. The AEX index closed 6.14, or 1.1 per cent, lower at 576.70. ASM Lithography, the semiconductor equipment maker, led the decline, finishing €2.60, or 4.1 per cent, down at €60.80. Milan held up better than most of its counterparts, boosted by merger news and speculation. The Mibtel index was flat, closing four higher at 23,990.