German equities pushed higher in Frankfurt, reversing three consecutive losing sessions. However, trading was again narrow and turnover subdued. Easing interest rate concerns gave support to financials.
Concern that the European Central Bank would push up interest rates when its monetary policy committee met on August 31st have weighed heavily on bank and insurance shares in recent sessions. Yesterday, however, there was renewed buying. Allianz gained €10.20 to €388 while among banks HypoVereinsbank put on €1.03 at €67.70. Deutsche Bank improved €1.54 to €98.14.
Paris reversed early gains to close at 6,513.71 after another session of seasonally thin trading volumes.
France Telecom stayed out of favour, losing a further €4.10 at €122.30 as investors continued to fret about the heavy cost of the third generation of German mobile phone licences.
Other benchmark heavyweights to meet with selling were supermarkets leader Carrefour, off €2.60 at €77.10, and LVMH which shed 15 cents at €89.60. Utility Suez Lyonnaise des Eaux lost €4.10 at €177.5 for a two-day fall of €5.5 per cent.
Remy Cointreau stumbled heavily on the news of the acquisition of Bols, the Dutch drinks group, falling €1.60 or 4.1 per cent to €37.90.
Amsterdam trading was again dominated by telecommunications leader KPN which continued to decline after a big broker made a significant reduction to its target price for the shares. With 23.2 million shares changing hands after 19.6 million on Monday, the stock ended €1.05 lower at a fresh low for the year of €30.20. It stood at €75.63 in March.
Driven partly by options activity, retailer Ahold and ABN Amro stayed firm, adding €1.15 at €33.75 and 41 cents at €28.85 respectively. Oil price strength continued to support Royal Dutch which gained €1.31 at €69.78.
Milan drifted in and out of negative territory as traders waited in the wings ahead of last night's interest rate decision from the Federal Reserve. The all-share Mibtel index eventually settled down 0.23 per cent at 32,285 after Telecom Italia joined an afternoon retreat by telecoms stocks, falling 3.3 per cent. Its parent companies, Olivetti and Tecnost, both lost more than 2 per cent while Seat, its Internet partner, fell 1.09 per cent.
