EADS, the pan-European defence company, was the biggest blue-chip faller in Europe on Wednesday after two of its major shareholders decided to cut their stakes in the company.

Media group Lagardere and carmaker DaimlerChrysler both announced they were reducing their holdings in the airbus parent in order to focus on their core businesses.

Lagardere will halve its stake in EADS from 15 per cent to 7.5 per cent, while DaimlerChrysler will also lower its stake by 7.5 per cent, in a move aimed at increasing the free float of EADS while keeping French and German shareholdings equal.

Goldman Sachs raised its recommendation on Lagardere from “outperform” to “in-line” and the stock rose 3.7 per cent to €66.80.

DaimlerChrysler, meanwhile, finished up 1.9 per cent at €48.92. The sale will still leave it with 22.5 per cent of EADS’ equity

A further to blow to EADS came from news that it had been beaten in the quest to find a suitable partner for its satellite business.

Defence electronics group Thales, which had been widely seen as a possible partner, announced it was to acquire the satellite business of Alcatel, the French telecoms equipment maker.

The cash and shares deal will give Thales control over Alcatel’s satellite business, in exchange for Alcatel increasing its stake in Thales to 21.6 per cent.

Alcatel closed up 2.1 per cent to €13.35 while Thales fell 2.5 per cent to €36.36.

“We obviously have had contacts with EADS,” said Denis Ranque, chairman and CEO of Thales. “This transaction is not hostile to them, on the contrary.”

EADS’ shares tumbled 4.4 per cent to €32.73.

The FTSE Eurofirst 300 index finished the day in positive territory, closing up 0.4 per cent after a choppy morning which saw the index dip to 1,369.89 only to recover in the afternoon to close at 1,379.11.

Heavily weighted oil stocks provided much of the impetus for the market, with the sector rising 0.9 per cent.

Finnish oil group Neste was among the beneficiaries up 3.8 per cent at €28.90. France’s Total rose 1 per cent to €218.30. Statoil added 1.4 per cent to NKr 187 and Repsol fiished 0.4 per cent higher at €23.25.

Banking stocks suffered yesterday with Sweden’s SEB down 1.3 per cent to SKr195, whilst Greece’s EFG Eurobank slid 1.6 per cent to 31.54.

French insurer CNP Assurances reached a record high yesterday after it reported a rise in profit for 2005 of 46 per cent, ahead of expectations.

The company attributed the jump to rising equity prices and strong performances in its three main markets of France, Italy and Brazil. CNP closed up 4.2 per cent at €87.30.

Sodexho, the French catering company, said like-for-like sales in the first six months of the year rose 5.5 per cent, but warned that sales growth could slow in the second half. The shares fell 1.3 per cent to €39.70.

Italian eyewear manufacturer Luxottica was the winner in Milan yesterday after it announced first quarter consolidated sales were up 20 per cent. Without being precise about the figure, Andrea Guerra, chief executive, said the results were “particularly encouraging”.

The company, which makes glasses for Prada, amongst others, finished up 4.1 per cent at €23.74.

Another big gainer in Italy was Autostrade. The largest toll road operator in Italy rose 2.6 per cent to €20.94 after it said a 2 per cent increase in traffic in the first three months of 2006 would boost its first-quarter profits.

In Brussels, telecoms companies moved higher after Morgan Stanley raised its rating on Belgacom from “underweight” to “equal- weight”.

It argued that the stock’s poor performance last year made its valuation more attractive, particularly if the company bought out the 25 per cent minority interest in its mobile unit Proximus - currently owned by Vodafone.

“This would be perceived very positively by the market, and on our estimates it would have a positive impact on valuation of up to €2 per share,” said analyst Luis Prota.

Shares in Belgacom finished up 1.8 per cent at €27.52, with mobile phone group Mobistar up 2 per cent at €61.55.

Property stocks were also big gainers, with Gecina up 3.8 per cent at €113.90 and Unibail 3.4 per cent higher at €154.40.