Financials slip back on rates nervousness

European bourses traded narrowly against a background of limited news flow and no follow-through from London where the market…

European bourses traded narrowly against a background of limited news flow and no follow-through from London where the market was closed for a holiday.

Frankfurt moved sideways with most interest focused on financials ahead of Thursday's meeting of the European Central Bank Monetary Committee and on Deutsche Telekom following news of a US takeover.

Commerzbank appeared to bear the brunt of the interest rate nerves amid worries about a rise this week for European money costs. The stock came off 86 cents at €36.62 while Deutsche Bank dipped 69 cents to €98.86.

Deutsche Telekom pushed modestly higher after announcing the $6 billion (€6.67 billion) purchase of US mobile phone group Powertel. The telecoms giant is still negotiating the takeover of VoiceStream of the US for $46 billion. The stock gained 53 cents at €44.83 in 6.8 million shares traded.

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Firmer features included truck maker MAN, which added 40 cents at €31.45, and, among tech leaders, Epcos, up €1.35 at €110.65.

The Xetra DAX index was up 28.97 at 7,336.14 at 5.30 p.m. German time.

Paris ended 19.91 better at 6,615.02 on the CAC-40 index with solid gains for media shares helping to maintain the upward momentum.

Pay-TV leader Canal Plus rose amid renewed talk of sector consolidation and news of new product launches. The shares gained €4.80 at €168.80. Elsewhere in the sector, Publicis rose €15.50 to €428.50.

Tyre giant Michelin rose €1.20 to €35.20. Among pure motor stocks, Renault shed 60 cents at €50.80 and Peugeot came off €3.20 at €219.60. Profit-taking sent network service provider Equant down €1.15 at €42.90.

Amsterdam added 4.25 at 695.60 on the AEX index in the wake of strong gains for market heavyweight Philips which rose 2 per cent.

Philips jumped to a session high of €55.55 after announcing that its IT services arm Origin was to link up with Atcos of France. The stock ended €1.10 higher at €54.95 in seven million shares traded.

Milan overcame mid-session losses after a technical delay in the derivatives market had thinned volume in morning trade. The Mibtel index closed 72 higher at 32,623.

Telecoms and technology shares were again among the best performers as investors across Europe continued to push the sector up. High-tech companies on the Nuovo Mercato also rose in line with the rest of Europe.

Among blue chips, Internet portal and yellow pages publisher Seat Pagine Gialle finished 0.7 per cent lower at €3.50. Telecom Italia was up 0.4 per cent at €13.81 and Tim 1.7 per cent to €9.50.

Helsinki edged ahead, helped by a rise in Sonera after the group sold its stake in US operator Powertel to Deutsche Telekom for $786 million. The Hex general index rose 40.42 to 13,465.22 as Sonera put on €1.24 to €37.13.