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Techs lead Europe ahead
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June 20, 2000: 10:28 a.m. ET
Nasdaq bounce lifts bourses as media provides focus; investors hammer Vivendi
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LONDON (CNNfn) - European technology shares rallied Tuesday to send all of the region's major equity markets modestly higher, with the blue-chip index in Paris leading the region as its telecom components weighed in with sharp advances.
Bourses had stuttered after a weak open on Wall Street before tech and telecom shares regained momentum as the Nasdaq composite built on its 3 percent gain Monday. London added 0.6 percent to close near its session high while Frankfurt posted a smaller gain.
The benchmark CAC 40 in Paris was the firmest of the region's major indexes, closing up 0.76 percent at 6,554.92 as telecom and tech shares posted firm gains, though firms involved in two deals in the media and advertising sectors lost ground,
The three-way merger of French utility and media firm Vivendi, Canada's Seagram and French broadcaster Canal Plus pulled both Paris-based stocks sharply lower.
Frankfurt's Xetra Dax rose 28.47 points to end at 7,227.27, a 0.40 percent advance but roughly 50 points below its session high. Gains among technology components countered a mixed performance among financial stocks as speculation over possible bank deals led to active trading in the sector.
London's benchmark FTSE 100 index suffered the most following the U.S. open, but regained momentum in late afternoon trade to close up 0.57 percent at 6,526.90, 10 points below its session peak, with its media and tech components providing most of the momentum.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, rose 0.91 percent to 1,627.31, with its technology sub-index up 6.4 percent while media and utility stocks lost ground.
U.S. markets were mixed after the April U.S. trade deficit for April came in higher than expected, though slightly below March's record gap. The Dow Jones industrial average was 0.8 percent lower at the close of European trade, while the Nasdaq composite was 0.6 percent ahead.
Interest-rate view
Analysts expect European markets to seesaw as investors continue to reassess the outlook for interest rates in the United States and Europe. The European Central Bank meets Thursday to set rates, though no change is expected after its half-percentage point rise earlier this month.
"The deals have been the de-icing on the cake," George Hodgson, European equity strategist at ABN Amro in London told CNNfn.com. "The more dominant issue is the Nasdaq bounce, which we remain distrustful of, as we feel the market is being too complacent about interest rates."
In the currency market, the euro seesawed, climbing to 95.45 U.S. cents after the report on the U.S. trade deficit, having earlier shed gains after the release of a stronger-than-expected survey of German business confidence from the influential Ifo Institute. The euro ended New York trade Monday at 95.94 cents.
Telecom outweigh Vivendi slide
In Paris, Vivendi (PEX) shares closed down 7.6 percent at  89.10 after it agreed to buy Canadian liquor and entertainment company Seagram (VO: Research, Estimates) and the outstanding shares in Vivendi's 49 percent-owned affiliate Canal Plus (PAN) for a total of more than $46 billion.
 Canal Plus shares were suspended at one point after reaching their daily limit. The stock ended 11.2 percent below its Monday close at 180.30.
However, strong demand for telecom and technology shares kept Paris in the black, with chipmaker STMicroelectronics (PSTM) adding 5.5 percent to top the list of CAC 40 gainers.
Telecom equipment maker Alcatel (PCGE) rose 3.6 percent and France Telecom (PFTE), the CAC 40's largest component, ended 4.3 percent ahead. Telecom rival Bouygues (PEN) rose 2.3 percent.
In other sectors, engineering firm Alstom (PALS) gained 3.4 percent and life-sciences operator Aventis (PAVE) added 3.3 percent.
Outside the CAC 40, advertising firm Publicis (PPUB) slumped 10 percent after it agreed to acquire Britain's Saatchi & Saatchi (SSI) for 1.96 billion ($1.89 billion) to create what Publicis said would be the world's fifth-largest advertising company. Saatchi shares, which jumped 27 percent Monday, ended 2 percent higher.
Media lifts London market
In London, biotech firm Celltech (CCH) topped the list of FTSE 100 gainers with a 9.7 percent advance, rebounding from an early decline. Computer-services provider Sema Group (SEM) supported the tech rally with a 6.9 percent jump and chip designer ARM Holdings (ARM) rose 5.9 percent.
Media firms also enjoyed strong demand, with magazines and radio company Emap (EMAP) up 4.6 percent and financial news provider Reuters (RTR) gained 5.7 percent.
 Newspaper publisher Daily Mail & General Trust (DMGT) was the exception in the sector, sliding 7.5 percent, the weakest stock on the FTSE 100.
Shell Transport & Trading (SHEL) weighed on the index as its third-largest component lost 2.4 percent as oil prices continued to slip.
Mobile-phone company Vodafone AirTouch (VOD) climbed 1.5 percent, recovering some of the previous day's 4 percent decline.
SAP leads, Commerzbank slips
In Frankfurt, Europe's largest software company SAP (FSAP) led the market with a 6.3 percent advance, while electronics and engineering company Siemens (FSIE) rose 3 percent. Airline Deutsche Lufthansa (FLHA) also added 3 percent.
 Retailer KarstadtQuelle (FKAR) slumped 11.4 percent after announcing a 6 percent rise in revenue in the five months to end May. Steel maker ThyssenKrupp (FTKA) slid 3.7 percent.
Commerzbank (FCBK) was 3.3 percent lower, erasing the previous day's gain after it announced that it had held co-operation talks with rival Dresdner Bank (FDRB). HypoVereinsbank (FHVM), the latest to be linked to Commerzbank, shed 1 percent and Deutsche Bank (FDBK) lost 1.9 percent.
In Amsterdam, ASM Lithography, a maker of semiconductor manufacturing equipment, gained 9 percent while Philips Electronics gained 3 percent. The AEX index closed 0.7 percent higher.
In Stockholm, mobile-phone maker Ericsson jumped 5 percent, a rise matched in Helsinki by global market leader Nokia. 
-- from staff and wire reports
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