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European bourses modestly higher

08/03/2004 12:23
Europe's bourses were slightly higher mid-morning on Monday with car stocks again showing strength.

The Eurotop 300 rose 0.3 per cent to 1,025.67 with Frankfurt's Xetra Dax up 0.3 per cent to 4,139.75 and the Paris Cac-40 up 0.4 per cent to 3,774.3. London's FTSE 100 though was only marginally higher at 4,548.5.

By the close on Friday, the tech-heavy Nasdaq Composite was little changed on the day but up almost 1 per cent for the week, reversing six straight weeks of declines. The S&P 500 was up 0.2 per cent to 1,156.88, putting the broader index up 1 per cent for the week. The Dow Jones Industrial Average was up 0.1 per cent to 10,596.00, up 0.1 per cent for the week.

On the corporate front, the merger chatter surrounding Deutsche Bank was fuelled further as JP Morgan as reportedly asked the German government whether it would resist a takeover offer for Germany's biggest bank. The German finance ministry denied it had been approached. Deutsche added 0.1 per cent to €75.06. Deutsche shares have been strong recently, rallying 9 per cent last Thursday on talk Citibank would bid. The smaller Commerzbank, also seen as vulnerable, added 0.7 per cent to €15.60.

Lloyds TSB's annual profits came in ahead of expectations, but the UK banking group decided against a share buyback to allow it flexibility for acquisitions. The bank's decision to raise its dividend to 23.5p reassured investors fearing a cut, while life assurance arm Scottish Widows increased profitability by 13 per cent. LTSB's strategy had been organic growth and the bank calmed the market's initial concerns saying no acquisitions were imminent. After a lively start, the stock rose just 0.3 per cent to 456p.

The car stocks were again strong with Peugeot up 1.2 per cent to €42.58, Renault 0.8 per cent at €58.35 and Volkswagen 1 per cent ahead at €39.45 and DaimlerChrysler 0.8 per cent better at €36.73.

Eads was the Eurotop's biggest loser as profit-taking set in after the Airbus builder, swung to a larger-than-expected profit of €152m. Eads was down 1.4 per cent to €18.68 as concerns over its dollar exposure remain and its guidance was seen as a little disappointing.

Earnings before interest and tax at Veolia, the French utility, were in line with expectations and the stock lost 0.1 per cent to €24.18.

Aventis, facing a hostile takeover from Sanofi-Synthelabo, added 1 per cent to €62.30, as Sanofi chief executive Jean-Francois Dehecq said the mooted "white knight" merger of Aventis with Novartis would be completely different project to his drug group's offer.

Greek stocks opened higher, with the benchmark general share index up 1.4 per cent to 2,523.77 after conservatives won the Sunday elections ending 11 years of socialist government.