Shares in Frankfurt rode out the bearish invective from US Fed chairman, Mr Alan Greenspan, and news of another Internet deal from Deutsche Telekom, the second in three days, helped keep the mood upbeat, with the telecoms giant this time linking up with Commerzbank. The two plan to swap stakes in their as yet unlisted Internet arms, TOnline and comdirect. Late on Tuesday, Telekom announced links between T-Online and the Internet operations of Lagardere, the big French conglomerate.
Telekom jumped €2 to €87 while Commerzbank, brushing aside bank sector weakness, surged €2.85 or 7.7 per cent to €39.75. Combined trading volume in the stocks rose close on 14 million shares.
Leading cyclicals continued to regain lost ground. In chemicals, BASF rose €2.51 to €46.50 and Bayer €1.30 to €43.90. Steel leader Thyssen Stahl improved €1.60 to €27.70.
Lufthansa raced ahead following an upgrade to "outperform" at Goldman Sachs. Shares jumped €1.19 or 5.8 per cent to €21.72.
Paris was largely unruffled by Fed warnings on interest rates. The CAC 40 index dipped briefly after Mr Greenspan's speech but regained its composure with fresh Internet talk boosting banking, telecoms and media stocks. Media group Canal Plus led the gainers in a rebound from recent losses.
Bank BNP rose on varying rumours of either a takeover bid or an Internet deal. BNP denied speculation it was the target of a bid by a German bank. Its shares gained €4.90 to €84.20. France Telecom also benefited from the rumours, bouncing back from a period of underperformance to gain €10.20 to €165.20. HSBC raised its price target for the shares from €110 to €180.
Amsterdam finished higher after a session characterised by wild swings at electronics giant Philips. An upbeat results report which took in a share split and possible plans for an IT spin-off sent Philips up to €178.40, at which point the stock was suspended due to technical problems. When trading resumed, the shares had reverted to €172.25 before finally closing 40 cents lower at €168.10 in volume of 7.2 million shares.
