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Europe posts mixed gains
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February 1, 2000: 10:59 a.m. ET
Frankfurt gains on telecoms; Paris up on media gains; euro still weak
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LONDON (CNNfn) - Europe's major stock markets enjoyed gains Tuesday as Frankfurt's key index closed 3 percent higher while Paris gained 2 percent. London posted a modest advance after recovering from a three-month low.
The telecom and media sectors combined with some upbeat European earnings reports provided some slight relief from the global interest-rate gloom that held back markets Monday.
The Xetra Dax in Frankfurt was the region's best performer, ending 215 points, or 3.14 percent, higher at 7,050.46, on the back of strong rises by its two largest telecom components, Deutsche Telekom and Mannesmann.
The CAC 40 in Paris closed 2 percent ahead at 5,773.42 as its key media components all surged on new ratings by analysts following recent deals. London's benchmark FTSE 100 ended 23 points, or 0.37 percent, higher at 6,291.60, after recovering from a slide to a three-month low of 6,231 at one point during a volatile session.
Wall Street opened flat after its surge Monday, with the Dow Jones industrial average trading up 0.41 percent at the close of business in Europe.
Among smaller markets, the SMI in Zurich ended 1.9 percent ahead, the AEX in Amsterdam gained 1.1 percent and the OMX in Stockholm jumped 3.3 percent.
The FTSE Eurotop 300, a broader index of the largest European stocks, climbed 1.42 percent to 1,519.66, with its technology sub-index rising almost 4 percent and telecom and media shares 2 percent ahead.
A surge in the dollar dominated the currency markets, taking it to fresh three-month highs against the euro and the yen on expectations that the United States will engineer a soft economic landing and limit Wednesday's expected rise in interest rates to 0.25 percentage points. The euro hovered around 97.20 cents having touched 96.70 earlier in the session.
In Frankfurt
Frankfurt rebounded from two sessions of decline with a 9.1 percent leap in Deutsche Telekom (FDTE) as its largest component enjoyed renewed buying interest after recent weakness. Mannesmann (FMMN) ended 4.7 percent higher as investors appeared to bank on the telecom and engineering group succumbing to the $160 billion hostile takeover bid from Vodafone AirTouch (VOD), which saw its own shares gain 6.7 percent. Mannesmann was reported to be mulling an offer to split the merged company 50:50.
Banking and technology shares also gained ground after falling back in recent sessions in line with the Nasdaq and fears of a higher-than-expected rise in U.S. interest rates. Software publisher SAP [FSE:FSAP3] added 2.6 percent while Deutsche Bank and Commerzbank (FCCM) gained 1.7 percent apiece.
In Paris
A reassessment of Vodafone's planned link with Vivendi (PEX) announced last weekend also pushed Paris higher and sent the French media and utility group's shares up 5.2 percent.
Pay-TV operator Canal Plus (PCAN), in which Vivendi has a 40 percent stake, closed 15.3 percent ahead after being suspended as analysts re-evaluated the stock in line with potential benefits from the Vodafone alliance. Media and defense group Lagardère (PMMB), which last month took stakes in two Canal Plus pay-TV units, was also suspended, before closing up 3.6 percent.
Heavyweight France Telecom (PFTE) gained 3.25 percent.
French technology also stocks gained ground, with chipmaker STMIcroelectronics (PSTM) gaining 4.1 percent. Auto parts maker Valeo (PFR) was the largest faller in Paris, losing 10 percent on a disappointing earnings report published after the market closed Monday.
In London
In London, Vodafone's performance overcame market weakness as the FTSE 100's early 1 percent advance was eroded by the fallout from the three-way battle over the future of National Westminster Bank (NWB). The bank formally rejected raised offers from Bank of Scotland (BSCT) and Royal Bank of Scotland (RBOS). NatWest shares lost 2.5 percent, Bank of Scotland fell 3.7 percent and Royal Bank slipped 3.3 percent.
Other heavyweight financials also declined, with Lloyds TSB (LLOY) and Barclays (BARC) closing down 1.5 percent.
Cement maker Blue Circle Industries (BCI) provided some lift, ending 5.6 percent higher after rejecting a 3.4 billion pound ($5.5 billion) hostile bid from French building-materials group Lafarge (PLG), which saw its own shares rise 2 percent. Hanson (HNS), another U.K. building-materials group, rose 2.7 percent.
Airport operator BAA (BAA) topped the FTSE 100's gainers with an 11.3 percent gain on reports that it is planning a rail link between London's three airports. The company posted upbeat nine-month earnings Monday.
Chip designer ARM Holdings (ARM) gained another 5 percent after beating expectations with its own 1999 earnings Monday. However, other technology plays fell back, with software consultant Sema Group (SEM) leading the decliners list with a 5.3 percent drop while rival Misys (MSY) fell 3.7 percent.
In other markets
The Stockholm market was lifted by a 6.3 percent surge in mobile-phone maker Ericsson, helped by an upbeat earnings report from larger rival Nokia, the world's largest mobile-phone manufacturer. However, Nokia shares ended narrowly lower having climbed 3 percent at one point.
In Zurich, a 2.9 percent gain in banking heavyweight UBS lifted the SMI index while drug heavyweights Roche Holding and Novartis gained 4.5 and 3 percent respectively. 
--from staff and wire reports
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