Widespread relief that the trading statement from LVMH contained no nasty surprises sparked a dramatic rebound for the luxury goods sector.
LVMH fell by 11 per cent last week amid a swirl of rumour and counter-rumour that the group was poised to wheel out a profits warning as the slowing global economy hit demand and ate into operating margins.
But the group's six-month statement, released at the opening bell, swept the black clouds away with news of a 12 per cent sales growth and an upbeat forecast for the rest of 2001.
LVMH surged 7.6 per cent to €57 in 2.1 million shares traded and sparked solid gains across the sector as a whole.
Swissair had another volatile session as traders and investors peered cautiously ahead to Thursday and the long-awaited new business strategy from the airline.
The shares, down from a high this year of SFr262 amid concern about loss-making associates, ended the session 1.6 per cent ahead at SFr94.35 after trading as high as SFr97. Utilities found favour as the gloom in the technology sectors helped keep the spotlight trained on defensive stocks. RWE rose 2.7 per cent to 49.05 and Eon 1 per cent to 61.90. Suez added 0.6 per cent at 37.74.
Technology stocks were weak in morning trade but recouped much of their losses after the Nasdaq opened stronger in the US.
Alcatel, the French telecom equipment maker, closed up 1.7 per cent at 19.45 after being 3 per cent down following analyst downgrades. JP Morgan said Alcatel had still not bottomed out and could see a further 15-20 per cent downside, in spite of last week's share price fall prompted by Marconi's profit warning.
Highwave Optical, the French supplier of optical equipment to Marconi which lost 45 per cent last week, bounced back 21 per cent to 5.99.
Nokia shares fell 3.9 per cent to 22.10, their lowest since October 1999, although up from their worst of the day when they were down 10 per cent.
Telecom stocks were mixed, with KPN falling 3 per cent to 6.22 and Sonera down 4.4 per cent to 8.32 but Telecom Italia rose 2.8 per cent to 10.51.
