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Europe holds onto financial gains
LONDON, England (CNN) -- European markets held onto their gains on Wednesday, as a strong performance by insurance and banking stocks overshadowed a weak start on Wall Street. London's FTSE 100 rose 1.2 percent to 3,973.1 and the CAC 40 blue chip index in Paris gained 1.5 percent to 3,190.09, while Frankfurt's electronically traded Xetra Dax was up 1.1 percent to 3,201.14 in late trading (the German market was set to close at 1900 GMT). The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 1.1 percent, with the life assurance and insurance sub-sectors leading gains. "Now [that] equity markets are rising, insurers are gaining due to their asset management holding," Wolker Judszus, European insurance analyst at WestLB Panmure, told Reuters. Europe's biggest insurer Allianz (FALZ) was the top gainer in Frankfurt, rising 4.4 percent to 108.71 euros in late trading. On Wednesday, industry sources said Allianz has not yet received a formal offer for its 44 percent in consumer products group Beiersdorf, and a takeover of the Nivea skin cream maker is unlikely this year. (Full story) France's Axa (PCS), the region's No. 2, added 4.8 percent higher at 14.54 euros, while the UK's Royal & Sun Alliance (RSA) rose 6.2 percent to 133.37 pence in London. Munich Re (FMUV2), Europe's largest reinsurer, was up 3 percent to 132.85 euros in late Frankfurt trading and Swiss reinsurer Converium, the world's No. 9 reinsurer, jumped 8.4 percent to 62.85 Swiss francs after its chief executive told Reuters it would beat analysts expectations by positing full-year profit of about $80 million. "Insurance companies are like investment trusts -- they reflect what's going on in the markets. Obviously, Converium is having an impact as well," John Hatherly, head of global analysis at M&G Management, told Reuters. The banking sector continues to be fuelled by speculation that a bidding war could break out for France's sixth-largest bank. Credit Agricole (PAGR) fell 0.6 percent to 15.80 euros -- erasing earlier gains -- after it increased its stake to 17.4 percent in Credit Lyonnais from 12.2 percent, although rival BNP Paribas has already raised its stake. (Full story) Credit Lyonnais (PCL) added 0.6 percent to 53.90 euros and BNP Paribas (PBNP) jumped 4.6 percent to 38.20 euros. Troubled Italian carmaker Fiat rose 3.6 percent to 9.03 euros as investors continued to reward the group for management changes. Chief Executive Gabriele Galateri announced his resignation on Tuesday, less than six months into the job, and amid a wave of strikes by Fiat workers protesting against layoffs. On Wednesday, Chairman Paola Fesco said he planned to resign next year but vowed to resist pressure to quit now and accused Italy's government of running a campaign to lynch him. (Full story) Europe's largest home improvement retailer Kingfisher (KGF) gained 5 percent to 217 pence after it said third-quarter retail profit rose 15.7 percent as a strong do-it-yourself market offset weaker electrical goods sales. (Full story) Richemont, the Swiss luxury-goods group, was down 0.8 percent to 26.05 Swiss francs after dealers told Reuters that investment bank Lehman was selling 30-35 million shares in Britain's biggest tobacco company, British American Tobacco, on behalf of Richemont. British American Tobacco (BATS) edged up 0.2 percent to 598 pence. The AEX index in Amsterdam rose 1.4 percent and Milan's MIB30 index gained 0.9 percent, while the SMI in Zurich lost 0.1 percent. In the U.S. on Wednesday, stocks declined in morning trading amid discouraging comments from Intel's chairman and a new wave of geopolitical concerns. Shares of Intel (INTC) dipped slightly after the No. 1 chipmaker's chairman made some discouraging comments at an industry conference, saying that it may be too early to call a rebound in the computer chip sector, despite recent industry outlooks showing an upturn. (Full story) Investors were also shaken after a Spanish vessel, acting on information from U.S. authorities, intercepted a ship filled with 15 Scud missiles on its way from North Korea to Yemen. Yemen has claimed ownership of the missiles, which it said it bought at an earlier time, for its defense force. (Full story) At 1515 GMT, the Nasdaq composite was down 2.58 points to 1388.18 and the Dow Jones industrial average fell 44.57 points to 8529.69. The Standard & Poor's 500 index lost 3.18 points to 901.27.
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