Cars keep Frankfurt in record territory

European markets went back on the offensive yesterday, shrugging off early weakness in the broad market on Wall Street and moving deeper into record territory. The FTSE Eurobloc 100 index gained 1.1 per cent at 1,285.65 and the FTSE Eurotop 100 index improved 0.3 per cent at 3,442.09. The FTSE Eurotop 300 index rose 0.6 per cent to 1,488.69.

Consolidation talk boosted the steel sector, which rose 5.8 per cent. But mining ended as the day's best performer, gaining 6.1 per cent.

Frankfurt continued to power into record territory as investors shifted back into value stocks. Motors were again in fine fettle. BMW gained €3.25 at €30.75 and DaimlerChrysler improved €2.29 at €73.24. Volkswagen rose €4.49 at €55.15 after Lehman Brothers put out a positive note on the stock.

Paris retreated from early highs to close modestly ahead, pulled back by early weakness on Wall Street which left the CAC-40 index 10.03 firmer at 5,540.16. Index heavyweight France Telecom came under pressure but was balanced by the performance of banks, cars and high-tech stocks. Among recovering high-tech issues, taking a lead from the Nasdaq, STMicroelectronics put on €8.40 or 6.6 per cent to €135.50.

Credit Lyonnais shot up €3.30 or 9.2 per cent to €39 on news that Societe Generale had taken a 3.8 per cent stake and did not discount raising its holding. SocGen was €2.60 higher at €228.60.

On the downside, France Telecom lost €1.70 to €113.50 after the telcoms regulator ruled it must cut its interconnection tariffs next year.

Amsterdam moved higher, adding 5.69 to 627.85 on the AEX index following good gains at Philips and Royal Dutch. Philips tracked the Nasdaq in New York, rebounding €4.80 to €127.20. Royal Dutch rose €1.96 to €62.26 with 17.8 million shares traded. Chemical leader Akzo Nobel stayed strong, adding €1.55 at €50.30. Zurich extended early gains as derivatives-related buying sent the SMI index 69.6 higher at 7,317.4.

Milan turned higher as telecom and Internet-related stocks extended recent gains. The Mibtel index finished 248 firmer at 26,667, back within striking distance of Tuesday's all-time high.