Primakov sacking puts bourses on negative path

Most European markets closed lower, depressed by the sacking of Russian prime minister Mr Yevgeny Primakov and the resignation of Mr Robert Rubin, the US treasury secretary.

The FTSE Eurobloc 100 index, which covers leading companies in the euro zone, closed 5.49 or 0.5 per cent lower at 1,066.34. The FTSE Eurotop 100, covering countries inside and outside EMU, fell 11.46 to 2,977.88.

Frankfurt closed down, unable to track a last-minute rebound in other European markets. The Xetra Dax index shed 48.25 or 0.9 per cent to 5,249.24, under pressure from concerns about political stability in Russia.

Truck-maker MAN led the gainers, adding €1.66 or 5.8 per cent to €30.51 following a 9.7 per cent slide in the stock since late April. Hoechst remained in focus after doubts emerged about its planned merger with Rhone-Poulenc of France. Shares in the chemicals company slid €1.45 or 3.4 per cent to €41.35.

Paris recovered from intraday weakness to close virtually unchanged. The blue-chip CAC-40 index added 4.81 to reach 4,354.79.

Luxury goods group LVMH rose €12.50 or 4.8 per cent to €271.40, boosted by news of the acquisition of US cosmetic group Hard Candy.

Volatile high-tech issue STMicroelectronics rose €5.40 or 5.5 per cent to €103.70 after Prudential Securities raised its rating of the stock. Oil stocks were weak after a sharp fall in oil prices. Total closed €2 lower at €119.50. Meanwhile, Elf-Aquitaine fell €3.60 or 2.5 per cent to €138.50.

Brussels suffered sharp afternoon falls in a knee-jerk reaction to the Rubin news but recovered to finish the day only slightly down. The market was shaken up by an announcement about the reshaping of the Bel-20. Real Software rose €5.50 to close at €134 on the news it is to replace PetroFina. Bekaert was penalised for slipping out of the Bel-20, dropping €26.80 to €423.20.

Amsterdam drifted slightly in low pre-holiday trading, under global pressures. The AEX index fell 2.93 or 0.5 per cent to 556.84.

A mixed day for blue chips included falls for Royal Dutch, down €1.30 at €54.45 as the crude oil price weakened, and Nedlloyd, down €1.85 or 7 per cent to €25.70 on disappointing first-quarter results. ABN Amro rose 30 cents to €21.20 after reporting record first-quarter Asia results.

Madrid closed almost flat as a strong performance by blue chips offset nervousness about political developments in Russia and the US. Several banks outperformed the market, with BSCH rising 18 cents or 0.9 per cent to €20.58, Argentaria climbing 22 cents or 1 per cent to €22.32, and Popular finishing 30 cents or 0.4 per cent higher at 67.95. The general index ended 0.71 higher at 902.19.