European insurance stocks came under pressure on an otherwise mundane day after the sector received a broker downgrade on the view that its relative out-performance during much of 1998 was unlikely to be repeated next year.
Mr Kevin Ryan at Williams de Broe said asset values had been inflated by the expectation of consolidation. At the same time, the euro would increase transparency for investors customers.
"This will see the continuation of falling insurance rates, and stocks brought on a country-weighting basis lose this support once euroland becomes a reality," said Mr Ryan.
Frankfurt saw a sharp fall in Allianz, buffeted by news that Deutsche Bank was to issue a 1.3 billion euro convertible bond exchangeable for Allianz shares. Dealers noted that if the bond was exercised, it would account for 1.6 per cent of Allianz stock. It fell 19 deutschmarks to DM558 while Deutsche Bank was DM1.07 lower at DM97.32.
The broad market was lower, hit by the weak dollar and news of higher November unemployment, which suggested economic recovery might be faltering. The Xetra DAX index registered a fall of 12.98 to 4,708.19.
Paris was in hesitant mood after a three-day gain of 121 points. The CAC-40 index ended off 5.81 at 3,765.41 after hitting a session low of 3,754.21.
Motors were among the weaker stocks, with Renault slipping 4.10 French francs to Ffr257.90 and Peugeot Ffr19 to Ffr880. Among component groups, Michelin improved Ffr9.60 at Ffr227.70, but Valeo lost Ffr10.10 or 2.2 per cent at Ffr453.90.
Oils rallied towards the close, helped by a better tone for international oil prices. Total, down to Ffr572 at one stage, ended off Ffr1 at Ffr586. Elf Aquitaine improved Ffr4 at Ffr685.
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