Bourses retreat slightly from early highs

Bourses rallied yesterday after Wall Street's surge on Friday, although most came off highs in later trading.

The Eurobloc 100 rose 8.82 or 0.8 per cent to 1,103.58, the Eurotop 100 climbed 24.11 or 0.8 per cent to 3,035.68, while the Eurotop 300 closed 11.27 or 0.9 per cent higher at 1,328.71.

Frankfurt extended the rally that began on Friday, rising a further 64.33 to 5,400.55 on the Xetra DAX index for a two-day gain of 4 per cent.

Metro jumped €2.30 to €55.60 on a renewed wave of merger speculation, although it was not clear whether the talk centred on a bid for Metro or a predatory move itself by the retailer.

Deutsche Telekom gained €1.25 to €43.29 after a media report hinted at higher-than-expected windfall profits from the regional cable units the telecoms giant has put up for sale.

Financials remained in demand. Munich Re added €4.30 to €185.30 and Hypo-Vereinsbank rose €1.65 to €58.60, helped by a weekend press report of possible retail banking links with Deutsche Bank.

Paris posted an all-time intra-day high of 4,708.03, but failed to hold its gains. The CAC-40 closed 4.33 or 0.1 per cent down at 4,668.04, its low for the day. Much of the movement was the result of a re-weighting of the index to take account of the entry of Credit Lyonnais and Societe Generale.

Renault came off €1.50 or 2.9 per cent to €50.50 on news of the possible link-up between its trucks division and Nissan Diesel, a subsidiary of Nissan Motors. Renault said a decision on the link-up would probably be made soon, although it declined to comment on a press report that it had decided against a tie-up.

Amsterdam moved ahead in thin trading volumes, with electronics giant Philips, up 3.6 per cent, providing most of the upward momentum. The AEX index advanced 8.57 to 587.20.

Retailers were active. Ahold added €1.45 to €35.05 in spite of a downgrade from "strong buy" to "outperform" at Morgan Stanley Dean Witter, and Vendex rose €1.50 to €27.30 after Morgan Stanley rated the shares a "strong buy" ahead of today's six-month results.

Zurich pulled ahead, along with its neighbours, but activity was subdued because of the market holiday in the US. The SMI index finished 62.5 higher at 7,200.1.

Madrid edged forward as Telefonica, the biggest stock on the market, outperformed after a broker's upgrade. The general index closed 2.80 or 0.3 per cent higher at 893.98.

Telefonica, which accounts for a fifth of the blue-chip Ibex-35 index, climbed 21 cents or 1.4 per cent to €15.63 after Morgan Stanley Dean Witter upgraded it to "outperform".

Istanbul soared 8.7 per cent, more than erasing the market's losses since the devastating earthquake on August 16th, as pledges of international aid lifted investors' spirits. The ISE National-100 index, which had fallen 7.7 per cent in the wake of the disaster, jumped 465.22 to 5,823.86.

Dealers said the market was also encouraged by lower-than-expected August inflation figures and Sunday's visit by Madeleine Albright, US secretary of state, who said Washington would seek a new trade and investment deal to aid economic recovery.

Milan was higher as fresh press speculation about mergers continued to lift the financial sector. The Mibtel index closed 173 higher at 23,924.

Among financials, Generali put on 1.3 per cent to €32.75, San Paolo-IMI 2.2 per cent to €13 and INA 2.8 per cent to €2.52.