The Anglo-American link-up between Vodafone and AirTouch sparked a rally in Frankfurt's telecoms sector in an otherwise quiet session in the absence of a lead from Wall Street. The Xetra Dax index finished up 103.07 or 2.1 per cent at 5,076.85.
Deutsche Telekom, rumoured last week to be considering a bid for the UK's Cable & Wireless, put on €2.31 to €34.90. Mannesmann, a partner of AirTouch in Germany's leading mobile phone network, rose €6.10 to €116.60 after it decided to extend its joint cash offer with Olivetti for Cellular Communications in the US.
Mobilcom, which said its mobile phone customer count nearly quadrupled in 1998, shot up €34 to €388, but Veba and RWE each lost 80 cents to €47.60 and €39.30 respectively. The utilities are partners with Vodafone in money-losing mobile carrier E-Plus Mobilfunk. Vodafone has said it is to sell its 17.2 per cent stake in E-Plus to put its backing behind Mannesmann Mobilfunk, the profitable carrier of which AirTouch owns 35 per cent.
Hoechst was a runaway winner, up €2.44 or €7.3 per cent at 36.01 on market rumours it was preparing to sell its industrial gas business to France's Air Liquide.
Banks were higher after last week's sell-off. Deutsche Bank put on €1.31 to €49.79, Dresdner Bank rose €2.65 to €38.65 and Commerzbank was 2.13 higher at 27.68.
Paris extended its rally to almost 5 per cent in three days with the CAC-40 index rising 98.48 to 4,153.29 as blue chips pushed higher.
Banks were the central focus, advancing on renewed merger speculation. BNP rose €7.55 or €10.9 per cent to €76.60 while Societe Generale gained €10.80 at €149.
Paribas added €4 at €82.70 while CCF, driven up by a French press story suggesting Mutuelles de Mans had appointed a top US broker to seek a buyer for its 7.6 per cent stake in the bank, rose 6.70 to 77.90.
Renault jumped on equally persistent rumours of imminent corporate activity. Amid market talk of possible links with Nissan of Japan and Scania, in which rival Swedish motor group Volvo has recently taken a big minority stake, the shares rose €2.24 to €43.79.
Oils, a weak sector recently as a result of soft international oil prices, rallied. Total gained €1.10 at €91.40 and Elf Aquitaine €3.75 to €99.75.
Saint Gobain and Usinor dragged their feet. The former fell €4.30 at €113.7 after a downgrade from "outperform" to "neutral" at Salomon Smith Barney on Latin American concerns. L'Oreal lost €2 at €627 after a downgrade from "buy" to "neutral" at brokers Cheuvreux.
Amsterdam pushed higher for a third session, adding €15.64 to €544.21 on the AEX index after a strong run for the financials where gains comfortably topped 4 per cent.
Sector leader Aegon rose €3.75 to €99.10 and ABN Amro 70 cents at €17.85 in 14.5 million shares traded. Fortis added €1.60 at €36.40 and ING €2.45 at €52.50. Philips was in fine form, too, gaining €2.60 at €63.25. News of a German takeover sent employment agency Randstad up €3.90 or 9.3 per cent to €46. Steel leader Hoogovens lost 60 cents or 2.3 per cent at €25.35.
Madrid climbed almost 5 per cent as banks continued to soar on Friday's news that Santander is to combine with BCH to create the biggest bank in the euro zone.
Santander and BCH, suspended on Friday, jumped almost 15 per cent. Santander ended €2.19 up at €16.83 and BCH €1.36 higher at €10.47. Rival bank Banco Bilbao Vizcaya rose €1.26 or 9.9 per cent to €14.01 on expectations it would soon announce a link-up with Argentaria or Popular.
The general index finished 40.64 or 4.8 per cent higher at 889.63, compared with 885.27 at the close last Tuesday, the day before Brazil announced its effective devaluation.
Milan edged higher in trading dominated by the banks. BCI, which was expected to discuss a merger with Banca di Roma at a board meeting yesterday, climbed 26.5 cents or 4.7 per cent to €5.88. Banca di Roma finished 7.3 cents or 5.3 per cent higher at 1.45. The Mibtel index closed at 24,278, up 559 or 2.4 per cent.
