European markets stayed firm as more benign inflation data from the US and another day of recovery for the euro offset warnings of possible tightening from the European Central Bank. The FTSE Eurobloc 100 index climbed to within six points of its record high, adding 0.9 per cent at 1,137.54. The FTSE Eurotop 100 rose 1.2 per cent to 3,128.20 and the broader FTSE Eurotop 300 1.2 per cent to 1,362.28.
Frankfurt closed higher but significantly short of its best levels of the day. The Xetra DAX index, which touched a peak of 5,671.77, ended 8.37 better at 5,619.26. Preussag gained €3.08 to €59.22 and BMW was also among the better performers, adding €9.90 at €722.
Chemicals leader Hoechst, in demand ahead of a shareholder vote on the group's plans to merge with Rhone-Poulenc of France, sparked switching within the sector. The stock climbed 90 cents to €46.80
Banks fell back, with Deutsche Bank losing 21 cents at €64.39. But Dresdner Bank, lately rumoured to be set to merge with HypoVereinsbank, stayed firm, adding 61 cents at €45.10.
Paris posted one of the best rises in Europe. The CAC-40 index climbed 71.02, or 1.6 per cent, to 4,665.67. The three banks involved in a complex takeover battle all prospered after the stock market regulator cleared the way for a calendar to be set for the bidding process.
Banque Nationale de Paris has made hostile bids for both Societe Generale and Paribas in an attempt to prevent them merging. BNP rose €3.50, or 4.7 per cent, to €78.50, Paribas climbed €1.60, or 1.5 per cent, to 108.90, while SocGen closed €4.90, or 2.9 per cent higher, at €171.50.
Amsterdam ended at a high for the year with the AEX index rising 4.97 to 594.34. ING stood out in a financial sector. The shares, buoyed by a Korean venture, added €1.20 at €53.25.
Milan was lifted by gains in neighbouring markets and increasingly technical trade ahead of today's options expiry. The Mibtel index finished 107 higher at 25,267 with banks remaining at the centre of attention.
