Frankfurt rallies as Paris rises in dull trade

Frankfurt recouped much of an early 2 per cent fall, helped by a neutral start on Wall Street. By the close, the Xetra DAX index was 19.62 lower at 4,988.59.

Speciality chemicals and metals group Degussa tumbled €3.35 or 8.1 per cent to €37.85 after reporting a 9 per cent fall in first-quarter pretax profits and disclosing it was the subject of a second Holocaust-related class action lawsuit.

While the company said that, in spite of difficult market conditions, it expected good full-year figures, the three-month results brought a downgrade from WGZ Bank "as a result of poorer expectations for the sector".

Software producer SAP staged a technical rebound, putting on €17 or 5.4 per cent to €334 after recent falls and ahead of final 1998 results due today.

Earlier this month, SAP reported worse-than-expected preliminary 1998 results, which sent its shares sharply lower.

Industrial giant Siemens recouped €1.80 to €59.60 after Friday's sharp fall when the company said sales would slow in the remainder of its 199899 business year. Paris pared early losses to close with the CAC-40 index above 4,000. The benchmark ended up 31.47 at 4,050.80 in dull volumes after touching a low for the session of 3,972.62.

Cap Gemini stayed in favour, adding €6.90 at €157 for a three-day gain of almost 13 per cent following last week's strong profits statement.

Motor components group Valeo also benefited from recent solid results, adding €3.50 at €72.50. In oils, Elf Aquitaine jumped 4.90 or 5.2 per cent to 100.

Sodexho Alliance came off €9.30 at €164 after a local broker downgraded the catering group.

Amsterdam rallied, adding 6.63 at 525.36 on the AEX index following solid gains for a number of international stocks, notably Unilever and Philips.

The former, hit lately by news of shrinking operating margins at Swiss food rival Nestle, gained €1.60 to €65.30, while Philips rose €2.25 or 3.4 per cent to €67.75 on talk of a possible bid for the group's medical division.

Madrid rallied from early losses as gains by utilities helped outweigh losses among banks.

Milan finished lower despite a strong performance by internet-related stocks. Olivetti, the computer and telecommunications group, was the most heavily traded stock on a quiet day. It ended 7.2 cents or 2.3 per cent higher at €3.161. Mediaset, the television group, gained 34.6 cents or 4.4 per cent to reach €8.266. The stock has recently been upgraded by Deutsche Bank and Goldman Sachs.