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European markets roar
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September 24, 2001: 1:33 p.m. ET
Battered airline sector leads gains; insurers, retail and oil stocks follow
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LONDON (CNN) - Europe's major bourses soared Monday, led by the battered airline industry, after carriers won approval from regulators for extended insurance coverage.
London's FTSE 100 jumped about 180 points, or 4 percent, to close at 4,614, while the CAC 40 blue chip index in Paris climbed 208 points, or 5.7 percent, to 3,861. Frankfurt's Xetra Dax leapt 247.1 points, or 6.5 percent, to close at about 4,034.
Many airlines were facing the possibility of grounding services without adequate insurance after insurers threatened to withdraw coverage after terror attacks in the U.S. on September 11.
The European Union cleared the way on Friday for its member states to offer relief on certain insurance coverage. Market watchers warned that the rally may be short-lived after markets fell to more than three-year lows last week.
"Stock will attempt to rally," Jeremy Batstone, market strategist at NatWest Stockbrokers, told CNN. "But we will not see the same kind of volumes and volatility as we did last week, however; economic indicators out this week could show the world is in recession."
No one was talking in terms of a sustained recovery in markets dominated by uncertainty over the timing and scope of U.S. retaliation for the September 11 attacks on the World Trade Center in New York and the Pentagon near Washington, D.C.
"The insecurity is still there," said Christian Schmidt, a trader with Helaba in Frankfurt. "As long as this insecurity is still there, there won't be major movements on the buy side."
British Airways (BAY), Europe's biggest airline, rose more than 12 percent. The company said it may sell assets, including property, if loses from the attacks on the United States grew. The deal could be worth £2 billion ($2.9 billion), according to weekend press reports.
Swissair, the debt-laden Swiss airline group, rose 11.7 percent, after earlier surging more than 25 percent. The company outlined plans to axe 3,000 jobs and restructure its business. Deutsche Lufthansa (FLHA), Europe's second-largest airline, rose 4.4 percent.
Insurers, retail and oil stocks, battered in the wake of the September 11 terrorist attacks, recovered some ground. AXA (PCS), the world's biggest insurer, rose 8.2 percent, luxury goods group LVMH (PMC) jumped 16.2 percent, and TotalFina Elf (PFP) gained 4.1 percent in Paris.
Shell Transport & Trading (SHEL), which owns 40 percent of the world's second-largest publicly traded oil company, Royal Dutch/Shell Group, rose 8 percent. But BP (BP-), the world's No. 3 oil operation, dropped 3.7 percent.
Deutsche Bank (FDBK), Europe's biggest bank, rose 17.4 percent. The company agreed to buy Zurich Financial Services' investment-management business for $2.5 billion. Zurich stock rose 15.1 percent.
Among the few stock in negative territory, British Telecommunications (BT-A) fell 3.2 percent after saying it would take a £500 million ($728 million) charge for investments.
Infineon Technologies (FIFX), Europe's second-biggest chip maker, fell 4.3 percent as prices for computer memory chips continued to drop. Spot prices for standard 128 megabit 16x8 DRAM memory chips used in personal computers were quoted at $1.39-$1.50 on Monday, less than half Infineon's total production costs of $3.40, according to Reuters.
In Amsterdam, the AEX index climbed 5.8 percent. The SMI in Zurich rose 6.7 percent and Milan's MIB30 index gained 7.1 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 5.1 percent, with the auto, steel, information technology, and life assurance sectors in positive territory.
All of Europe's sector indices were higher, with a broad base of banks, chemicals, insurers and techs leading the way. All but three of the 50 largest stocks by market capitalization gained ground – a sharp contrast from Friday's weakest point when all 50 fell.
U.S. stock markets posted a strong rally at midday Monday as investors battered by last week's stock selloff found hope in positive comments from companies and analysts.
At midday, the Dow Jones industrial average rose 350.82 to 8,586.63, while the Nasdaq composite index rose 70.46 to 1,493.65. The Standard & Poor's 500 index added 36.50 to 1,002.30. 
-- from staff and wire reports
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