Europe markets edge higher

January 11, 2002 Posted: 1654 GMT

LONDON (CNN) -- European markets finished the final session of the week in positive territory, with retailing stocks leading gains.

Europe's biggest retailer Carrefour (CARR) was the top gainer in Paris, jumping 5.4 percent after reporting late on Thursday a 7 percent rise in 2001 sales and saying it had recouped lost market share in France.

Marks & Spencer (MKS), the UK's biggest clothing retailer, rose 2.8 percent in London. Matalan (MTN), Britain's biggest budget clothing retailer, soared 11.8 percent after Christmas sales rose more than nine percent, beating expectations.

London's FTSE 100 edged up 0.1 percent to 5,198.6 and the CAC 40 blue chip index in Paris rose 0.9 percent to 4,554.69, while Frankfurt's late trading Xetra Dax rose 0.2 percent to 5,237.96.

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The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 0.9 percent, with the IT, retail, leisure and food and drug sectors in positive territory.

But investors were cautious ahead of a speech from Federal Reserve chairman Alan Greenspan -- his first on the world's leading economy since the autumn.

That is due at 1855 GMT and investors will study his words carefully for hints on interest rate trends ahead of the Fed's monetary committee meeting at the end of this month.

"I think he's going to lean towards indicating that the Fed isn't in a hurry to raise rates," said Mark Cliffe, chief European economist at ING Barings in London, adding that economists were sharply divided on the tone Greenspan would adopt during his speech in San Francisco.

"I think he's still concerned to keep the stock market afloat and to hold down bond yields. He's going to be more inclined to talk the markets up rather than down."

Stocks that were active included Deutsche Telekom [FSE:FDTE], Europe's biggest phone company by sales, which fell 2 percent amid concerns about its ability to cut debt. German automaker DaimlerChrysler said it would sell its stake in software house Debis to Telekom in the next six months.

On Thursday, Telecom joined the bidding to buy a majority stake in Czech telecom carrier Cesky Telecom, which is expected to sell for $1.5 billion. Telekom has said it plans to reduce its 66 billion debt mountain to 55 billion by the end of the year.

Software house Logica (LOG) fell 5.3 percent after J-Phone, the mobile phone unit of Japan Telecom and its parent Vodafone Group (VOD), said it would halve its spending.

Credit Suisse First Boston said it believed J-Phone was Logica's largest client in text messaging systems, representing around 70 percent of LMN (Logica Mobile Networks) Japanese revenues.

Reuters (RTR), the world's biggest news and financial data company, fell 1.5 percent, extending the previous session's decline after its majority-owned brokerage Instinet (INET: down $0.32 to $8.38, Research, Estimates) said its share volume fell 30 percent in December.

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German drug giant Bayer (BAYG) was down 3.3 percent after German lawyer Michael Witti said that attorneys filing a class-action suit against the company over the withdrawn cholesterol drug Baycol had found a way to represent German and other cases outside the United States.

In Amsterdam, the AEX index rose 1.3 percent and the SMI in Zurich rose 0.8 percent, while Milan's MIB30 index gained 0.8 percent lower.

In midday trading in the U.S. were cautiously higher as investors waited for Greenspan's speech. The Nasdaq composite index edged up 0.1 percent to 2,050.08, while the Dow Jones industrial average also gained 0.1 percent to 10,083.57.

--Reuters contributed to this report