Hopes of mergers in the pharmaceuticals and tobacco sectors gave a boost to European markets as investors braced themselves for higher rates after today's European Central Bank meeting. The FTSE Eurobloc 100 index rose 5.45 to 1,129.07 while the FTSE Eurotop 300 put on 6.36 to 1,349.50.
Paris shares closed at a record high for the fourth consecutive session, rising in tandem with early Wall Street trading. The benchmark blue-chip CAC-40 index reversed early losses to close up 19.32 at 4,917.84, in heavy volume of 2.7 billion. Michelin was among the leaders of the pack with a rise of €1.05 to €41.80. Thomson Multimedia made a sparkling debut, finishing its first day's trading at €29.02, a 24 per cent premium to its flotation price of €25.62. The offer was 40 times subscribed. Seita closed up almost 10 per cent at €56 after press reports about a possible link-up with Gallaher.
Frankfurt edged ahead as telecoms extended recent gains and Siemens and Adidas Salomon pressed higher in the wake of strong quarterly reports. The Xetra Dax index closed with a gain of 13.92 at 5,560.87, with investors largely already discounting a rise in rates by the European Central Bank today.
Siemens put on €2.75 at €90.20 after the group beat analysts' forecasts with a 37 per cent increase in 1998/99 preliminary net profit. Among the telecoms sector, Mannesmann rose 75 cents to €145.10 and Deutsche Telekom was 1.32 higher at €46.27, adding to gains on Tuesday when the Nasdaq composite index rose to a record high. Adidas Salomon jumped €3.70 to €74 after reporting a 34.5 per cent rise in third-quarter pre-tax profits.
Amsterdam shares coasted higher on the back of strong interest in high-tech stocks. The AEX blue chip index closed up 10.18 at 579.17. ASM Lithography, the semiconductor equipment maker, forged higher as an industry association showed global chip sales reaching their highest monthly level. The group took its lead from surging US chip makers, rising €4.65 or 6.8 per cent to €73.15. Philips also benefited from the buoyancy in semi-conductor stocks. Shares in the company closed up €4.70 to €100.50.
Milan was lower as weakness in Enel on its second day of trade weighed on the market. The Mibtel index finished 29 easier at 23,165. Enel shares fell to a low of €4.23 before edging up to close 0.02 per cent easier on the day at their IPO price of €4.30.
Madrid outperformed other European bourses amid hopes that the European Central Bank would raise interest rates. Traders said the move would help to curb the country's rising inflation which at 2.5 per cent is running at twice the euro zone average. Telefonica was boosted by strong demand at the initial public offer for its Internet unit Terra Networks. Shares rose 35 cents to €16.30, a rise of over 2 per cent.
