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European Equities with modest gains

"The equity market is still good value and the picture doesn't change if you compare the UK with other major European centres," one analyst said.

Analysts said Thursday's German discount rate cut has improved the interest rate picture for the UK and the investment outlook generally.

Bid activity continued, this time in the electricity sector as South Western Electricity agreed to a revised bid by Southern Co worth 965p per share. South Western added 39p to 951.

The rest of the sector was higher but guardedly, as worries persist that the the Department of Trade and Industry will ask the takeover authorities to investigate all the industry bids.

Pointing to the discrepancy between the share's price and Southern's offer, analyst Marshall Whiting at SGST said: "It (the share price) is telling you the market is expecting some kind of general referral."

Bid activity continued, this time in the electricity sector as South Western Electricity agreed to a revised bid by Southern Co worth 965p per share. South Western added 39p to 951.

The rest of the sector was higher but guardedly, as worries persist that the the Department of Trade and Industry will ask the takeover authorities to investigate all the industry bids.

Pointing to the discrepancy between the share's price and Southern's offer, analyst Marshall Whiting at SGST said: "It (the share price) is telling you the market is expecting some kind of general referral."

BAe's partner in Orange is Hong Kong conglomerate Hutchison Whampoa which has a 68.42 percent stake.

Hutchison said after the market closed that it plans to raise stand-alone long-term debt financing for Orange this year.

"There's no rush to do it but my guess is that it will probably be completed by the end of this year, Hutchison Telecom's managing director Hans Snook told Reuters

He said the comapny is talking to banks about a debt package but denied that it is considering a share flotation.nL25123505

The UK financial markets are closed on Monday Aug 28.-Reuter