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Europe mixed, telecoms up
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August 14, 2000: 12:29 p.m. ET
Prospects for end to German mobile phone auction power gains
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LONDON (CNNfn) - Europe's major markets closed mixed Monday, with telecom stocks leading gains amid expectations that the German auction for third-generation mobile phones licenses is not going to break the bank as bidding enters the final week.
Six companies are bidding for five or six licenses to provide service in Europe's biggest telecom market after Swisscom's dibetel unit threw in the towel Friday. Early estimates of bids topping $55 billion had sent telecom share prices spiraling downward.
London's FTSE 100 index climbed 0.5 percent to 6,419.9 points, with mobile phone powerhouse Vodafone AirTouch (VOD) and internet data carrier Energis (EGS) leading advancers.
The CAC 40 in Paris added 0.9 percent to 6,609.61, with chip maker STMicroelectronics (PSTM) and construction and mobile phone operator Bouygues (PEN) leading the gainers.
Frankfurt's Xetra Dax closed up 8.69 points, or 0.12 percent, at 7,331.67.
The SMI, which is heavily weighted to financial stocks, in Zurich climbed 0.4 percent.
The FTSE Eurotop 300 index, which includes a basket of Europe's biggest companies, rose 0.7 percent, with its information technology sub-index up 2.5 percent.
U.S. markets edged lower Monday, with the Dow Jones industrial average slipping 16.11 points to 11,011.69, while the technology-rich Nasdaq composite rose 0.1 percent.
In the currency market, the euro slipped slightly against the U.S. dollar, fetching 90.30 cents, down from 90.34 cents late Friday in New York trading.
Sonera gets a boost
In London, index heavyweight Vodafone AirTouch (VOD) jumped 2.4 percent. Vodafone, the world's biggest mobile phone company, is seen as one of the winners in the 3G bidding. Germany's dominant telecoms company Deutsche Telekom (FDTE) also rose 2.4 percent.
Rival France Telecom (PFTE) rose 1.6 percent in Paris after media reports said the company's recently acquired mobile phone division Orange could be a frontrunner in the bidding to buy Finland's Sonera, which has said it has held exploratory talks about a buyout.
Sonera shares fell 1 percent after initially climbing more than 5 percent in Helsinki. Orange and Sonera declined to comment on market speculation.
Other telecom stocks also rose. Internet data carrier Energis (EGS) rose 5.6 percent and business telecoms operator Colt Telecom (CTM) climbed 2.9 percent in London. Construction and mobile phone operator Bouygues (PEN) rose 2 percent and Suez Lyonnaise de Eaux (PLY), a rival bidder in the French 3G mobile phone license in November, gained 1.6 percent.
Drug stocks also powered gains in London. Glaxo Wellcome (GLXO) gained 1.1 percent and merger partner SmithKline Beecham (SB-) rose more than 1 percent.
Select mortgage lenders moved higher on speculation that the industry may consolidate further after Barclays (BARC) agreed to buy Woolwich (WHH) for $8.1 billion last week. Abbey National (ANL) added 2.8 percent and Alliance & Leicester (AL-) advanced 1.6 percent.
Shares in insurer Royal & Sun Alliance (RSA) jumped 4.5 percent. Schroders Salomon Smith Barney raised its price target to 550 pence from 460 pence and repeated a "buy" rating.
Other financial stocks rose, included investment bank Schroders (SHR), up 2.8 percent, and Bank of Scotland (BSCT), up 2.7 percent.
Consumer electronics retailer Dixons (DXNS) rose 2.8 percent. The company agreed to an alliance to sell computer games online and off with Gameplay.com. The retailer, which owns 80 percent of Britain's biggest internet service provider, Freeserve (FRE), could take a 22.5 percent stake in Gameplay as part of the agreement. Shares in Freeserve declined 1.5 percent.
Optical component maker Bookham Technology (BHM) registered London's biggest decline, falling 7.1 percent.
Oil stock limited gains in London, with index heavyweight BP Amoco (BP-) falling 2 percent and rival Shell Transport and Trading (SHEL) losing 1.3 percent.
In the French technology sector, shares of telecommunications equipment company Alcatel (PCGE) rose 3 percent and computer consultant Cap Gemini (PCAP) rose 1.3 percent. Chip designer STMicroelectronics (PSTM) climbed 3.3 percent to lead the index higher.
Media and missiles company Lagardere (PMMB) rose 3 percent after reporting a 3 percent increase in revenue for the first half of 2000 compared with the same period a year earlier.
Automakers fell in Frankfurt. Luxury car maker BMW (FBMW) fell 2.6 percent. Rival DaimlerChrysler (FDCX) slid 0.9 percent and truck maker MAN (MAN) was off 0.7 percent.
Banking and financial stock also fell. Insurer Munich Re (FMVU) fell 3.3 percent, rival Allianz (FALV) declined 1.1 percent and Dresdner Bank (DRB) slipped 1 percent. 
-- from staff and wire reports
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