Wall Street's early rebound lifted European markets after a morning spent fretting about the prospects for higher interest rates and the conflicts in Kosovo and Kashmir.
The FTSE Eurobloc 100 index, which covers leading companies in the euro zone, closed 0.96 or 0.1 per cent lower at 1,040.47. The FTSE Eurotop 100, covering countries inside and outside the zone, rose 10.85 or 0.4 per cent to 2,921.33, while the broader FTSE Eurotop 300 settled 3.69 or 0.3 per cent higher at 1,269.48.
Frankfurt had a volatile session, falling to within a whisker of the 5,000 level in early trading, but recovering strongly in later trading. The Xetra DAX index finished the session up 6.67 at 5,070.98.
Deutsche Telekom surged to the top of the activity charts after an announcement that the government's stake of 1.7 billion shares would be registered for trading sparked frantic buying by index tracker funds. The stock, which will have a weighting of 13 per cent within the Xetra DAX index from June 18, up from 5.1 per cent at present, surged to €39 before closing €3.15 higher at €38 in some of the best volume of the year with 15.2 million shares traded. Leisure leader Preussag continued to improve, up €2.75 to €49.42. Construction group Hochtief rose €1.70 to €42.20 on acquisition news.
Paris drew back as cyclical and industrial stocks turned down. The CAC-40 index ended 11.40 or 0.3 per cent lower at 4,315.04.
Among car stocks, Renault came off €1.05 or 2.7 per cent to €37.25 after ING Barings cut its estimate for 1999 earnings. Peugeot shed €4.50 or 3.1 per cent to close at €142.
Valeo, the car parts retailer, suffered its second sharp fall in successive sessions, closing €2.50 or 3.1 per cent down at €78.30. The stock has been hit this week by a series of downgrades by analysts. Elf- Aquitaine, the oil group, ended €1.60 or 1.2 per cent higher at €138.80 after it made a surprise bid for Saga Petroleum of Norway.
Amsterdam reversed early losses on the AEX index to close little changed at 552.38, down 0.75. ABN Amro stood out among weak financials, rallying 40 cents at €21.25. Hoogovens was the day's best performer, adding €1.80 or 5.1 per cent at €37.10.
Elsevier moved down close to its low for the year on a Dutch press report pointing to earnings disappointments this year. The media group dismissed the report and the shares ended all square at €12.15 after €11.65.
Madrid edged forward in lacklustre trade, despite a rally by Telefonica, plus 57 cents to €45.98, the most heavily weighted stock in the market. The general index finished 2.46 or 0.3 per cent higher at 889.42.
