Leading European stock markets had contrasting performances yesterday as London and Frankfurt posted good gains but the Paris bourse slipped a tad after an indecisive day. London stocks posted a 1.4 per cent gain after losses earlier in the day due to worry about the situation in Russia, traders said.
The Footsie index tacked on 76.7 points or 1.4 per cent on the day to end at 5,553.7 points. In Dublin the ISEQ index fell 0.2 per cent in light trading volumes.
The firing of the Russian government and the return of Mr Viktor Chernomyrdin as prime minister were not welcomed by financial circles, who feel he previously displayed an inability to reform the shaken Russian economy. Meanwhile, trading in emerging market currencies remained nervous, although the major losses seen on Friday were not repeated, as investors await the outcome of the Russian situation. The Venezualan bolivar and the Hong Kong dollar remained under pressure.
Currencies of commodity exporting states also came under pressure, mainly due to the fall in the price of oil and other commodities. Norway's central bank increased rates by one percentage point to defend the krone, following a 1.5 point rise on Friday. The currency regained some ground after the increase, while the Canadian dollar also faced selling pressures.
On the equity markets, Wall Street's rise in the first part of the New York session countered some of the fears about the Russian situation. Last night the Dow Jones Index closed 32.96 points higher at 8,566.61.
Paris share prices ended the day slightly lower after an indecisive day which saw prices open higher, then fall on concern about Russia and make a final upward effort before settling back at the close.
The CAC-40 index of leading stocks ended the day 0.16 per cent lower at 3,937.43 points. The Bourse has nosedived 3.52 per cent. The index had begun the new week up 0.61 per cent from Friday's close, but by noon was off 1.29 per cent as a speech by President Yeltsin failed to convince the markets.
It edged up again after Wall Street opened slightly higher, and was up 0.07 per cent mid-afternoon, but soon the minor optimism trickled away and the index ended the day in minus territory.
Frankfurt stocks got back on an upward path in nervous trading, thanks to a technical rally caused by the big drop suffered at the end of last week, traders said at the close.
The DAX index ended the official session at 5,234.88 points, up 1.38 per cent on the day, to regain some of the ground lost on Friday, where the indicator nosedived by 5.92 per cent, shaken by the risks of a worsening of the Russian crisis. The market remained very nervous, rising 0.78 per cent at the opening, falling back later, and then rallying again. Traders said the Frankfurt market should now get back on an uptrend, helped by a firm Wall Street on Friday. The Amsterdam stock exchange fell 1.57 per cent as the AEX index finished at 1,136.32 points, against 1,154.51 points at the close on Friday.
In Milan, the Mib30 index gained 172 points or 0.5 per cent to end at 34,506 points, while Madrid shares were down a sharp 1.64 per cent on the day on the Ibex-35 indicator, which closed at 9.262.8 points.