Europe's markets moved in a tight range as supportive news in the tech sector was balanced by downward pressure from US economic data.
German motor stocks had a bad day. Volkswagen's first-quarter results fell short of market expectations, nervousness built up around BMW ahead of figures tomorrow and Daimler-Chrysler ran into a wave of selling following a negative press story.
Daimler-Chrysler fell back on worries about warranty costs at Mercedes-Benz, the luxury car operation, that the share price has lent on heavily for support over the past year following the group's problems at Chrysler in the US.
The Financial Times reported on Tuesday that Mercedes had been grappling with quality problems and that warranty costs at the company had risen threefold in two years. Daimler-Chrysler fell 1.1 per cent to #56.15.
VW came off 1.3 per cent at #54.50 as investors opted to pay most attention to the group's German accounts rather than its first results based on International Accounting Standards.
Among component stocks, Pirelli shot ahead after a resilient trading statement. First-quarter results, before extraordinary items, climbed steeply and Pirelli's forecast for the full year was equally reassuring. The shares rose 1.8 per cent to #3.62.
Utilities Vivendi International and Suez, which put out positive statements on Friday, came in for upgrades from Goldman Sachs. The broker has lifted both to "market out-performer" and stepped up target prices to #56.10 at Vivendi and to #215 at Suez.
Vivendi added 0.4 per cent at #76.75 and Suez 1.6 per cent at #173.50. Iberdrola, which puts out first-quarter figures today, added 0.5 per cent at #16.78 while Endesa (out tomorrow) put on 1.1 per cent at #18.70.
Sandvik lost ground in spite of positive comment from Morgan Stanley which pushed up earnings estimates for 2001 by 12 per cent following the Swedish tool maker's first-quarter figures. The stock came off 5 per cent at 222 Swedish kroner.
Roche's voting bearer shares continued to climb, up 4.9 per cent to #159.50, as investors absorbed the implications of Monday's news that Novartis had acquired a 20 per cent stake in its arch rival. Roche's more liquid certificates slipped 0.6 per cent to 136.25 Swiss francs, while Novartis eased 0.7 per cent to SFr67.90.
The key question now is how financier Mr Martin Ebner's BZ Gruppe will use the $2.8 billion proceeds of the sale.
