Paris flat as Frankfurt reverses early weakness

Shares in Paris were flat as another report of benign US economic data, which eased interest rate worries, was counterbalanced…

Shares in Paris were flat as another report of benign US economic data, which eased interest rate worries, was counterbalanced by a dull Wall Street opening. The CAC-40 index closed just 16.21 lower at 6,532.84.

Telecoms network company Equant was by far the biggest gainer, rising 9.8 per cent to €50.50 as France Telecom and Global Crossing confirmed they had approached the group about a possible takeover. Equant's share price plummeted last month after releasing widening first-quarter losses.

However, STMicroelectronics fell 6.7 per cent to €66.90 after reports it was considering a capital boost of $1.5 billion (€1.56 billion) to finance investments. The reports said it planned to invest $2.5 billion to develop production sites this year, although the company denied this.

Non-ferrous metals group Metaleurop rose 7.5 per cent to €7.90 as investors continued to cheer news that the company had sold its German galvanising business several months ahead of schedule. It had jumped 4.3 per cent on Friday when the news first broke.

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Frankfurt reversed early weakness to push ahead in afternoon trading as buyers returned to selected blue chips.

BMW rose €1.05 to €34.18 after Dresdner Kleinwort Benson lifted earnings forecasts for the motor group and stepped up its target price to €36.

A renewed round of alliance talk sent steel leader Thyssen Krupp up 22 cents to €18.85 after a session best of €19.07. In Paris, mooted merger partner Usinor added 54 cents at €13.49.

In financials, Deutsche Bank improved €1.50 to €88.10 while Munich Re added €11.40 at €332.42.

The Xetra DAX index was 35.44 higher at 7,271.08 at 5.30 p.m. German time.

Amsterdam saw sector switching among media groups. Elsevier rose 56 cents to €12.31 in 13.3 million shares traded following a buy note from Deutsche Bank. VNU lost €2.05 at €56.45.

KLM ran into profit-taking, dipping €1.55 to €28. Philips fell €1.30 to €49.30. Financials were heavily traded.

ABN Amro shed 27 cents at €25.39 while Aegon gained €41 cents at €37.60.

The AEX index ended 1.93 ahead at 675.67.

The Zurich SMI index picked up from an early low of 7,784.6 to close 20.3 higher at 7,817.1.

Stockholm fell 3 per cent as investors raised cash to buy into telecom operator Telia. The general index lost 186.94 to 5,962.43.