LONDON (CNNfn) - Surging demand for German financial-services stocks pulled Frankfurt's key index higher at the close Friday as the Berlin legislature backed government plans to cut corporate taxes. Drug companies offset gains from telecom and technology companies leaving London unchanged on the day.
Frankfurt's Xetra Dax jumped 122.39 points, or 1.7 percent, to 7,318.38, with reinsurer Munich Re (FMUV) up 7.6 percent and insurer Allianz (FALV) adding 7 percent. Germany's Bundesrat, parliament's upper house, backed a budget package including 50 billion marks ($24 billion) in tax cuts. Holders of big stakes in German companies are expected to be the major beneficiaries.
London's FTSE 100 was little changed at 6,475.4, with drug companies, SmithKline Beecham and Glaxo Wellcome, on the decline and technology and telecom stocks powering higher.
The SMI index Zurich fell 0.2 percent. The Paris stock market was closed for the Bastille Day holiday.
The FTSE Eurotop 300 index, a basket of Europe's largest companies, rose 0.1 percent, with its insurance segment up 2.8 percent.
In the currency markets, the euro fetched 93.57 U.S. cents, little changed from 93.65 cents in late New York trading Thursday.
On Wall Street Friday, the Nasdaq composite rose 1 percent to 4,218.07, while the Dow Jones industrial average slipped 17.5 points, or 0.16 percent, to 10771.21.
Frankfurt banks, techs in the pink
In Frankfurt's financial-services sector Commerzbank (FCBK) rose 3.2 percent , Dresdner Bank (FDRB) added 5.7 percent and Deutsche Bank rose 3.4 percent as banks followed the big insurance companies' gains.
Also in Frankfurt, electronic components maker Epcos (FEPC) added  5.4 percent. Chipmaker Infineon Technology (FIFX) jumped 6 percent to top the leader board, after investment bank Morgan Stanley Dean Witter started coverage of the stock with an "outperform" rating. Chip designer ARM Holdings (ARM) climbed 7 percent in London.
Shares in diversified utility firm E.ON rose 3.3 percent on a report in the Financial Times that it is poised to sell its electronics arm to a U.S.-British consortium for around $2.3 billion.
Leading Dax losers were sportswear vendor Adidas Salomon (FADS), dropping 2.2 percent, and retailer Karstadt Quelle (KAR), which slipped 1.4 percent. Carmaker BMW (FBMW) 4.5 percent, DaimlerChrysler (FDCX) dropped 1 percent, and Volkswagen (FVOW) shed 2 percent.
 Drug makers across the Continent fell. SmithKline Beecham (SB-) dropped 4.7 percent in London and its merger partner Glaxo Wellcome (GLX) lost 4.7 percent. Anglo-Swedish rival AstraZeneca (AZN) slipped 2 percent, and biotech firm Celltech (CLT) dropped 2.7 percent. Germany's Schering (FSCH) dropped 5.2 percent in Frankfurt and Bayer (FBAY) shed 2.2 percent.
The U.K.'s biggest chemical company, ICI (ICI), declined 2.3 percent.
Tech shares were the best performers on London's FTSE index. Sema Group (SEM) jumped 7.6 percent, CMG (CMG) was up 9.2 percent, and IT consulting firm Misys (MSY) added 7.1 percent.
Britain's telecom sector also was strong, with Colt Telecom (CLT) rising 8.1 percent, rival British Telecommunications (BT-A) adding 1.2 percent, and Internet data carrier Energis (EGS) climbing 4.1 percent. In Germany, Deutsche Telecom (FDTE) rose 2.4 percent.
British mobile-phone retailer Carphone Warehouse (CPW) rose 7 percent on its first day on the London market, after pricing its initial public offering at 200 pence per share, near the middle of its previously indicated range of 170 to 220 pence.
Carlton Communications (CCM) slumped 7.3 percent after the British  government gave the go-ahead for its proposed merger with fellow commercial TV broadcaster United News & Media and also cleared a possible rival bid for either of the companies from Granada Media (GME). Shares in United slipped 1.4 percent, while Granada Media jumped 5.2 percent.
Banking and financial-services stocks were firmer in London. Barclays (BARC) added 3.2 percent, Standard Chartered (STAN) climbed 1.8 percent, and Halifax [LSE:HFX] rose 3.9 percent. 
-- from staff and wire reports
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