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Telecoms turn Europe up
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June 30, 2000: 4:31 a.m. ET
C&W, Alcatel lead modest telecom sector bounce; FTSE adds 1.2%
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LONDON (CNNfn) - A tentative rebound for hard-hit telecommunications stocks boosted Europe's leading markets Friday, after concerns about the high cost of securing next-generation mobile phone licenses sparked a sell-off a day earlier.
London's benchmark FTSE 100 index ended up 73.7 points, or 1.2 percent, at 6,312.7, with telecom company Cable & Wireless (CW-) making a late-day dash, up 7 percent. The index fell 1.2 percent on the week.
The blue-chip CAC 40 in Paris closed up 45.72 points, or 0.7 percent, at 6,446.54, led by a 7.2-percent climb for network equipment maker Alcatel (PCGE) and a 4.5-percent advance for chipmaker STMicroelectronics (PSTM). For the week, the index fell 1.5 percent. 
The Xetra Dax in Frankfurt rose 23.67 points, or 0.34 percent, to 6,895.01, led by retailer Metro (FMTR), up 4.9 percent.
The FTSE Eurotop 300, a broad measure of the region's largest stocks, rose 1.2 percent, as its technology hardware sub-index, which includes top mobile-phone makers, rose 5.9 percent.
"The main story here has been the relief rebound for telecom equipment manufacturers that have been hit so hard in the last few days," said George Hodgson, an equity strategist with ABN Amro. Down the road, "value" stocks such as financial and industrial sector equities could return to investor favor - if the economic backdrop, particularly in the United States, settles down and soothes lingering pressures for interest rate hikes to cool the economy. 
"I would sign up for the view that industrial, 'old economy' stocks could well be the next to move higher," Hodgson said. "But I don't see a definitive move until we see some of the economic data in July."
Wall Street was mixed as Europe's bourses closed. The Dow Jones industrial average was down slightly while the Nasdaq composite gained 1.7 percent.
In the currency markets, the dollar traded at ¥106.05, up from ¥105.32 in New York late Thursday despite the release of strong Japanese economic data, which suggested interest rates in Japan might soon move higher. The euro strengthened slightly to 95.55 U.S. cents from 95.20 cents Thursday.
Investors Thursday dumped shares of Europe's telecom companies after Swedish telecom equipment maker Ericsson warned that the high cost of new-generation mobile-phone licenses might slow profit growth in the sector. Ericsson rose 4.8 percent in Stockholm Friday, after falling 7.7 percent in the previous session.
On Friday, Alcatel said it was too early to determine whether the cost of new cell phone licenses would affect its revenue and said the mobile-phone business accounts for only 15 percent of total sales. Its stock had fallen 7.4 percent Thursday.
And the latest mobile auctioneer: Japan
Japan announced the results of its auction of third-generation phone licenses Friday, awarding permits to companies including British Telecom (BT-) and Vodafone AirTouch (VOD). BT shed 0.7 percent while Vodafone shares, the most weighted stock in the FTSE 100, rose 1.1 percent. 
Other gainers in the telecom sector included Finland's Nokia, the world's largest mobile-phone maker, rising 9.2 percent to virtually erase Thursday's 10 percent plunge. Spain's former state-owned phone company Telefónica rose 4.6 percent while Netherlands-based KPN rose 3.9 percent.
In London, insurer Royal & Sun Alliance (RSA) rose 7.9 percent, topping the list of FTSE 100 gainers.
In the media sector publisher Reed International (REED) rose 6.1 percent, while Emap (EMAP) fell 1.6 percent and EMI (EMI), a music publisher that is awaiting regulatory approval of a planned joint venture with CNNfn parent Time Warner Inc., sank 6.4 percent, leading the FTSE 100 losers. Financial news provider Reuters Group (RTR) fell 4.3 percent.
Cable company Telewest Communications (TWT) took a beating for a second day, dropping 3.4 percent on top of Thursday's 7.1-percent tumble after announcing it would sell $450 million of convertible bonds.
Outside the FTSE 100, Eidos (EID), the creator of Lara Croft and the "Tomb Raider" video game, added 9 percent after a report said U.S.-based Electronic Arts might step in as a "white knight" bidder for the company in the face of a bid from France's Infogrammes Entertainment. Shares of Infogrammes (PIFG) fell 4.3 percent in Paris trading. 
Among the blue-chip stocks in Paris, computer consultant Cap Gemini (PCAP) climbed 4.5 percent, while CAC index heavyweight France Telecom (PFTE) shed 2.3 percent and engineering company Alstom (PALS) dropped 3.7 percent.
In the French financial sector, bank Crédit Lyonnais [PAR:CL-] rose 3.8 percent. Auto maker Renault (PRNO) rose 2.6 percent.
Leading CAC losers was retailer Carrefour (PCA), off 4.5 percent.
In Frankfurt, major drug makers headed higher, with drugs and chemicals maker Bayer (FBAY) up 3.7 percent and Schering (FSCH) rising 2.2 percent. Medical technology firm Fresenius Medical Care (FFME) jumped 4.5 percent.
But Frankfurt's tech sector was weak. Software maker SAP (FSAP) shed 1.4 percent. Electronic components maker Epcos (FEPC) was the Dax index's biggest loser, falling 6 percent.
In the German auto sector, BMW (FBMW) slipped 4.6 percent and truck maker MAN (FMAN) fell 3.6 percent. 
-- from staff and wire reports
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