|
Merger talks boost bourses
|
 |
January 14, 2000: 12:47 p.m. ET
Europe stocks surge on Glaxo-SmithKline discussions; Dax at record
|
LONDON (CNNfn) - Europe's major stock markets all posted strong gains Friday, helped by the prospect of a blockbuster drug merger and strong gains by the region's major telecom and media companies.
Frankfurt led the charge to close at a record high after a 3.1 percent advance while Paris and London also moved ahead.
The Xetra Dax in Frankfurt closed up 217 points at 7,173.22, some 23 points off its session high. Its telecom components surged after Deutsche Telekom and Mannesmann both touted plans to float part of their Internet interests.
The Dax gained 5.8 percent from its Jan. 7 close. The rise in European drug and telecom shares combined with the surge in media stock this earlier week in the wake of the planned Time Warner-America Online merger to leave all of the major bourses ahead for the week.
London's benchmark FTSE 100 closed up 126.6 points, or 1.94 percent, at 6,658.10, boosted by a surge in drug shares after Glaxo Wellcome and SmithKline Beecham confirmed they had restarted merger talks. The FTSE gained 2.4 percent from its close last Friday.
The blue-chip CAC 40 index in Paris also was buoyed by telecoms, closing up 2.74 percent at 5,787.44 to post a 4.5 percent gain for the week.
Smaller markets also moved smartly ahead. The SMI in Zurich gained 1.04 percent to close at 7,513.90. The MIB 30 in Milan soared 3 percent, the Ibex 35 in Madrid gained 2.3 percent and the AEX in Amsterdam advanced 2.1 percent.
All of the markets had made a solid start to the session but were further boosted by the advance of U.S. markets following benign consumer price inflation data for December. The Dow Jones industrial average was up 1.2 percent at the close of business in Europe.
The FTSE Eurotop 300, a pan-European index of the region's largest stocks, ended 2.42 percent higher at 1,550.70.
A strong hint from U.S. Federal Reserve chief Alan Greenspan late Thursday that interest rates may go up next month put some pressure on the euro. The single currency slid almost 1.5 cents to close the session at $1.0134 after being under pressure all week after sluggish German growth data and upticks in inflation across the euro-zone.
The resumption of merger talks between
SmithKline Beecham (SB) and Glaxo Wellcome (GLXO) galvanized the London market, with SmithKline closing 7.7 percent ahead and Glaxo adding 4.5 percent. Rival AstraZeneca (AZN) gained 1.45 percent.
Telecom shares put in their best performance of the week, led by British Telecommunications (BT-A), which rose 4.9 percent after settling its disputed takeover of Ireland's Esat by offering rival bidder Telenor a stake in the telecom operator.
Vodafone AirTouch (VOD), the FTSE's second-largest component, gained 7 percent. Cable operator Telewest Communications (TWT) firmed 8.6 percent and Energis (EGS) gained 8.8 percent.
Media shares continued to enjoy strong demand. Satellite TV operator BSkyB (BSY) led the FTSE with a 15 percent surge amid hints of a looser regulatory framework in Britain and upgrades for the whole European media sector.
BSkyB's gains were more spectacular than those of content providers. Music publisher EMI (EMI) added 2.2 percent and TV and leisure group Granada (GAA) added 4 percent.
Media and advertising group WPP (WPP) rose 5.7 percent after a round of upgrades.
Chip designer ARM Holdings (ARM) was the best-placed of the tech stocks, closing up 6.4 percent. Accounting software maker Sage Group (SGE) rose 1.8 percent after an earnings upgrade from CSFB and computer services provider Logica (LOG) rose 8.8 percent.
Shares in British supermarket operator J. Sainsbury (SBRY) gained 5.1 percent after it said it is dumping its CEO and replacing him with the head of Britain's biggest life insurer, Prudential (PRU), which still rose 1.4 percent.
Retailers recovered some ground after sharp falls earlier in the week as investors digested the impact of falling margins. Electronics seller Dixons (DXNS), which fell 21 percent Wednesday, closed 6.7 percent higher. Marks & Spencer (MKS), the largest clothing retailer, added 4.6 percent.
The FTSE was pulled back by a 3.3 percent fall in BP Amoco [LSE:BPA, its largest constituent. The stock suffered from more concern about regulatory delays in its proposed takeover of Atlantic Richfield.
Brewing and leisure group Whitbread (WTB) fell 4.3 percent after ABN-Amro cut its recommendation on the stock. Mortgage bank Woolwich (WWH) was the weakest financial stock, down 5.2 percent amid concerns about falling lending margins. Rival Alliance & Leicester (AL) lost 4.8 percent.
Frankfurt was driven higher by a 4.9 percent surge in Deutsche Telekom (FDTE), its largest constituent. The company rose after a report that it will float part of its T-Online Internet service in the second half of the year.
Telecom and engineering group Mannesmann (FMMW) climbed 6.2 percent after saying it may float its own Internet business to boost its defenses against a hostile takeover bid from Vodafone.
Technology shares also lifted the Frankfurt market, with Europe's largest software developer SAP [FSE:FSAP3] posting another record close after a 2.8 percent advance. Electrical engineer and chip producer Siemens (FSIE) rose 5.2 percent,
Most financial shares also firmed, led by an 8.7 percent jump in insurer Munich Re, helped by expectations that premiums will rise. Rival Allianz (FALV) rose 7.8 percent.
Lufthansa (FLHO) was the only drag on the Dax, losing 2.1 percent following the profits warning Thursday from alliance partner United Airlines.
In Paris, defense-technology group Thomson-CSF (PHO) closed up 10 percent a day after agreeing to pay $2.2 billion for British rival Racal Electronics.
Lagardere (PMMB) rose 5.2 percent after confirming Thursday its purchase of TV assets from Canal Plus (PCAN), which ended flat.
Chip maker STMicroelectronics (PSTM) rose 7.3 percent to top the CAC gainers.
Telecom equipment maker Alcatel (PALS) rose 5.8 percent and data communications provider Equant (PEQU) gained 7.6 percent as the telecom sector enjoyed firm support. France Telecom (PFTE) ended 5.5 percent higher.
Drug maker Sanofi-Synthalebo (PSAN) added 4.3 percent and financial shares also climbed, led by a 5.1 percent advance in Crédit Lyonnais (PCL).
In Amsterdam, software maker Baan shed another 7 percent after announcing that its CFO has resigned. The company lost its chief executive two weeks ago at the same time it announced a profit warning. 
-- from staff and wire reports
|
|
|
|
|
 |
|
