LONDON -- The battle between the old and the new economies took on a new dimension Thursday as investors all over Europe made a mad dash to old-economy firms and away from the recently high-flying high-tech sector.

In London, the

FTSE 100

closed up 110.2 points, or 1.7%, at 6,557.2.

Needless to say, newcomer and over-hyped

Lastminute.com

fell again, down 25p, or 6.0%, to 387.5 ($6.08), which means it is just 7.5p above the offer price. The best offer available is 380p from marketmakers

Morgan Stanley's

, which brought the issue to market.

Baltimore Technologies

fell 12.50 pounds, or 10.4%, to 107.5 pounds,

Staffware

took a bath with a loss of 675p, or 19.5%, to 29.75 pounds, and

Affinity Internet

dropped 650p, or 13.3%, to 42.50 pounds. The

Techmark

index of leading tech stocks closed 288 points lower, or 5.7%, at 4,783.3,

Winners by a distance were the banks, with

Barclays

(BCS) - Get Report

up 137p, or 9.2%, at 16.27 pounds, and

Lloyds TSB

69p higher, or 12.6%, at 621.

Royal Bank of Scotland

was also there with a gain of 51p, or 6.6%, to 821.

After suffering in the wake of the recent

Procter & Gamble

profits warning,

Unilever

(UL) - Get Report

took a distinct turn for the better with a gain of 31p, or 8.5%, at 394.

BP Amoco

(BPA)

gained 14p, or 2.5%, to 568, after confirmation that

Arco

and it have agreed to sell their Alaskan interests to Phillips Petroleum.

Even a surprise rate hike of 25 basis points to 3.5% by the European Central Bank wasn't enough to frighten off investors and the Continent's stock markets closed solidly higher. The

Xetra Dax

in Frankfurt closed up 169.50, or 2.3%, at 7583.96 and the

CAC 40

in Paris ended 69.59 higher, or 1.1%, at 6258.53.

In Frankfurt, stocks recovered nicely from heavy losses made earlier in the week, as stodgy old economy shares outperformed the flashier techs and telcos. Industrial giant

ThyssenKrupp

soared 2.90 euros, or 12%, to 26.90 ($26.04) and sporting-goods maker

Adidas-Salomon

jumped 6.85 euros, or 13.7%, to 57.

Carmaker

BMW

climbed 0.70 euros, or 2.3%, to 31.75 after confirming that the company was preparing to dump its loss-making Rover unit. Chemicals giant

Bayer

(BAYZY)

surged 3.08 euros, or 7.3%, to 45.10 after the company reported surging 1999 profits.

Siemens

(SMAWY)

and

SAP

(SAP) - Get Report

were the only two losing issues on the Dax. Siemens fell 0.59 euros, or 0.4%, to 152.50 and SAP closed down 61 euros, or 6.6%, at 860.

Deutsche Telekom

(DT) - Get Report

was able to turn around early losses to end up 2.31 euros, or 2.8%, at 84.20 and

Epcos

(EPC) - Get Report

closed 8.20 euros higher, or 6.4%, at 136.70.