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London hits new high
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March 11, 1999: 4:59 a.m. ET
FTSE 100 apes Dow to break new ground; bank fever continues in Europe
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LONDON (CNNfn) - Europe's bourses were strongly higher early Thursday, boosted by the record-setting performance on Wall Street overnight. In London, the FTSE 100 index also hit a record peak.
Bank stocks remained in the limelight on the morning after BNP launched an unexpected $37 billion bid for rivals Société Générale and Paribas.
Europe's stronger open was fueled by a record close on Wall Street, where the Dow Jones industrial average vaulted 79.08 points to 9,772.84, and by a resurgence in oil prices amid hopes for an OPEC-led recovery in that sector.
London's FTSE 100 soared to a record high in early trading Thursday, buoyed by Wall Street, a surge in oil stocks and the positive sentiment surrounding a 1.9 billion pound ($3.1 billion) bid by insurer Prudential (PRU) for leading asset manager M&G (MG.). M&G stock soared 39 percent to 2,460 pence.
BP Amoco (BPA) shares soared 7.58 percent to 1,000 pence and Shell (SHEL) was up 5.5 percent to 383 on the back of crude oil gains spurred by a pact among Arab oil producers to cut output further.
Drinks giant Diageo (DGE), which posted higher half-year earnings, was trading over 1 percent lower at 711 pence.
Trading in the three French banks at the center of the bid resumed in Thursday's session, amid hints that the French government, in league with the country's central bank, may intervene. The government and bank are said to be concerned that BNP's surprise move could jeopardize government-sponsored plans to privatize Crédit Lyonnais.
BNP was down 0.52 percent at 77 euros, but Société Générale (PGLE) was up almost 10 percent at 159.6 euros, while Paribas (PPM) soared 14 percent to 98.10 euros.
The CAC 40 was 1.0.9 percent higher at 4,207.71.
Other French blue chips in focus, included Alcatel (PCGE), which confirmed Thursday that it sees its telecom business growing operating profit 40 percent in 1999 amid double-digit growth in the unit's sales. The telecom giant's shares were up 3 percent at 119.1 euros.
In Germany, the electronically-traded Xetra Dax was up 0.54 percent at 4,777.24.
Lufthansa (FLHA) pared some of its early gains and was up around 1.5 percent at 19.52 euros after the airline reported preliminary 1998 results showing a 40 percent rise in pretax profit.
DaimlerChrylser is likely to capture attention a day after the auto maker slammed the brakes on buyout talks with Japan's Nissan, leaving the road clear for France's Renault (PRNO) to pursue cooperation with the Japanese automaker. DaimlerChrsyler shares were up 0.20 euros at 80.20.
In Italy, Telecom Italia attempted to strengthen its defenses against Olivetti's hostile takeover bid by announcing plans to repurchase up to 10 percent of its shares and permit holders of savings stock to convert them into common stock.
Switzerland's SMI edged up 0.39 percent to 7,236.1.
-- from staff and wire reports
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