Bourses dip during day of subdued trading

Heavy selling pressure on drugs heavyweight Roche sent the SMI index in Zurich below the 8,000 level. The stock was hit by worries over price competition in the US. More significantly, Schroder Salomon Smith Barney replaced Roche in its model portfolio with Novartis, which the US investment bank said has far brighter prospects.

Roche certificates fell 340 Swiss francs to 15.245 francs while Novartis eased just two francs to 2,886 francs. Drugs groups in Europe and the US fell prey to concerns over US proposals to allow the reimport of drugs from countries where they were sold more cheaply.

Elsewhere, Paris spent most of the day little changed but then slipped at the end of the session to end 0.7 per cent lower at 6,294.06 on the CAC 40 index.

Traders said the market remained nervous and its direction was heavily dependent on the health of US markets and the price of oil.

The main losers were technology and telecom stocks, compounded by a disappointing start on the Nasdaq. Alcatel fell 5.1 per cent to €78.75, France Telecom was off 2.9 per cent to €118.90 and STMicroelectronics was off 2.5 per cent to €59.10.

Banking stocks provided investors with a safe haven. Societe Generale was the best performer in the CAC, gaining 3.5 per cent to €64.35, while BNP Paribas rose 2.2 per cent to €99.70 and Credit Lyonnais edged up 0.8 per cent to €41.90.

Bic, the maker of ballpoint pens, razors and cigarette lighters, rose sharply in anticipation of first half results today but handed back some gains to end 1.3 per cent at €50.20.

Frankfurt saw financial leaders push higher on a day of narrow trading in subdued turnover. A better showing by the euro and steady bond markets mostly explained the upturn for financials where the heavyweight insurers came in for a steady flow of buy orders.

Allianz rose €3.51 to €364.61 and Munich Re put on €5.75 at €330. In banks, Commerzbank rose 83 cents to €33.38 and Deutsche Bank €2.35 to €94.85. HypoVereinsbank gained 48 cents to €62.58. Metro continued to claw its way back from the lows of almost 40 touched this month. It rose €1.49 to €47.