(by Dr. Golfinger)

The depressing scenario of widespread apathy across the investment community left dealers mostly twiddling their thumbs and investors increasingly reluctant to get involved, especially in view of the recent disastrous performance by the tech/IT sectors, culminating in the Nokia sell-off.

The Eurotop index posted a further 0.5 per cent fall to 966.32.

And there was a growing view among market participants that matters might only deteriorate further as the height of the holiday season looms up in August.

There were signs that corporate activity may provide some comfort for the market, however.

Monday saw German pharmaceuticals and chemicals group Bayer acquire the over-the-counter drugs business of Switzerland’s Roche for €2.38, news which drove Roche shares to the top of the FTSE Eurotop 300 winners table to finish 1.9 per cent higher at SFr163.

Analysts at Barclays Private Clients said: "The purchase price was above our expectations, valuing the business at 2.25 times 2003 sales. The selling of the OTC business makes strategic sense to us, as Roche’s main exposure to hospital-based drugs leaves less need for an OTC business. While the OTC business was very cash generative, the company is generating a high level of cash from prescription pharmaceuticals and we believe that the market, at the moment, is lightly to attach a higher value to Roche as a more focused growth company".

Bayer, on the other hand, saw its shares suffer in the wake of the deal and slide 2.7 per cent to €21.65. Dresdner Kleinwort Wasserstein said: "We are surprised at the price Bayer is willing to pay."

In what was a mixed day for drug stocks, Germany’s Schering slipped 1.1 per cent to €46.89 ahead of second quarter figures scheduled for Thursday. These are expected to come in about 11 per cent higher, boosted by an expected sharp increase in sales of its multiple sclerosis drug, Betaseron.

Meanwhile, there was a subdued Frankfurt stock market debut for German biotech group Epigenomics, whose shares finished their first trading session at €8.57, after €8.47, compared with an IPO price of €9. The latter was the bottom of a €9-€11 price range which had already been lowered from an original €11.90-€14.50.

An IT grouping still being hammered by last week’s grim news from Nokia showed the latter down another 1.3 per cent to €9.69.

But the severest weakness in that sector came from Germany’s Infineon, whose shares plunged a further 3.4 per cent at €9.30, having retreated over 5 per cent last week.

Infineon’s second-quarter figures are due on Tuesday morning and are expected to please the market although investors will need reassurance about the outlook for the rest of the year and beyond.

The banks helped to cushion the decline in the FTSE Eurotop 300, with National Bank of Greece extending last week’s good performance, which was prompted by a bullish note on the stock and national sector issued by JP Morgan, and climbing another 1.4 per cent to €18.50.

But Banco Comercial Portugues shares dropped 3.3 per cent to €1.78 after the bank sold control of its life and health insurance business to Fortis, the Benelux bancassurer for €500m in cash.

In addition it said it was selling its non-life insurance businesses to Caixa Geral de Depositos, the Portuguese state bank, for €343m. As part of the deal, the state bank will sell 110m BCP shares via a bookbuilding at a range of €1.70 to €1.75 a share.

Fortis shares also gave ground, settling 1.1 per cent lower at €17.61.

Germany’s Allianz played a large role in driving the insurance sector lower, its shares closing 1.2 per cent off at €81.05 after Williams de Broe adopted a much more cautious stance on the stock after last week’s Capital Markets Day.

The broker cut its recommendation on the stock to "hold" from "buy" saying that Allianz’s claimed 12.6 per cent return on risk-adjusted capital in 2003 flatters the group’s performance.