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Europe's blue chips end mixed
LONDON, England (Reuters) -- European blue chips ended mixed on Tuesday as a rebound in insurers such as Aegon and Swiss Life was offset by a steep fall in autos after a profit warning from Volkswagen. The FTSE 100 index closed up 16.7 points, or 0.5 percent, at 3,452.7, well above the day's low of 3,400 as investors were encouraged by a steady start on Wall Street and a revival by financial stocks. The FTSE Eurotop 300 index was down 0.1 percent at 705.32 points, after it earlier fell below the 700 level for the first time since December 18, 1996. Danish drugs group Lundbeck bounced 10.5 percent after losing a quarter of its value on Monday in the wake of disappointing 2002 results. And Deutsche Telekom rose 5.2 percent on analyst upgrades after the German group's results on Monday indicated a turnaround had begun in the last quarter. But mobile phone leader Nokia slid after a worse-than-expected earnings update, dragging down rivals such as Ericsson of Sweden. A steady start on Wall Street provided some comfort. "There's generally a lot of uncertainty and the stock news that is coming out is generally neutral to negative," said Khuram Chaudhry, European equity strategist at Merrill Lynch. "A lot depends on the issues on the geopolitical side. Over the next week or so we are likely to see a continued theme of where we have been over the last week or so, which is one of a generally downward trend." Traders bemoaned the fact that the world's major powers remained divided on how to disarm Iraq. A fresh U.N. vote on Iraq was delayed due to splits among the Security Council members as efforts by Britain and the United States to give Iraq a March 17 ultimatum on scrapping weapons of mass destruction or face attack have failed to draw widespread backing. Amsterdam's benchmark AEX index outperformed its European peers, rising one percent as insurer Aegon leapt 7.9 percent after a broker upgrade and amid dealer talk of short-covering. Aegon led the rebound in insurers. The sector has hit multi-year lows in recent weeks as the impact of declining stock markets on insurers' equity assets have raised solvency fears. Swiss Life, which lost a fifth of its value on Monday, rose 3.6 percent, as the UK's Prudential added 3.9 percent. Europe's media sector hit its lowest level in a decade after Dutch publisher Wolters Kluwer said its benchmark profit would fall six percent this year. Rival professional publishers Reed Elsevier and Pearson fell on concerns that the U.S. state of Texas could cut its spending on school textbooks to balance its budget. Wolters Kluwer shares sank 16.5 percent, while Reed Elsevier fell 6.2 percent and Pearson shed 4.7 percent in London. The auto sector hit nine-year lows after Europe's largest carmaker Volkswagen AG warned it would fall short of last year's operating profit in 2003 due to weak demand and unfavorable exchange rates. Shares in Volkswagen sank eight percent, while domestic rival DaimlerChrysler dropped 2.8 percent. In France, Peugeot shed two percent, while Renault slid 4.5 percent. Among tech stocks Nokia, the world's biggest handset maker, tumbled after it warned of weaker sales and earnings in the first quarter due to poor demand for networks equipment and consumer reluctance to splash out on flashy color-screen phones. Nokia shares fell 1.1 percent, while rival Ericsson, which relies more heavily on network sales, sank 8.1 percent. France's Alcatel shed three percent. On Wall Street, the Dow Jones industrial average opened 0.3 percent higher and the tech-laced Nasdaq Composite index added 0.1 percent. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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