LONDON (CNNfn) - Europe's top markets closed mixed Friday as investors turned toward leading technology stocks, panning telecom stocks in the wake of Germany's $46 billion auction of new mobile phone licenses.
London's benchmark FTSE 100 index nosed up 0.25 percent to 6,543.7, bolstered by a 19.3 percent advance for optical component maker Bookham Technology (BHM).
The blue-chip CAC 40 in Paris shed 0.7 percent to 6,591.7, with top telecom sector stocks among the biggest movers, while the Xetra Dax index in Frankfurt fell 46.01 points, or 0.63 percent to 7,232.42. Zurich's SMI index fell 0.1 percent. 
The broader FTSE Eurotop 300 index, which is made up of Europe's largest companies, climbed 0.25 percent to 1,655.56, with the information technology hardware sub-index -- comprised largely of networking gear and mobile phone makers -- up 2.7 percent. The telecom services sub-index, made up of the telecom firms that buy those goods, fell 1.5 percent.
U.S. markets were mixed in midday trading Friday. The Dow Jones industrial average slipped 0.2 percent while the Nasdaq composite rose more than 25 percent.
"On the one side, we have a slight weak sentiment in the telecom sector due to the high payment for the Germany auction. That's been the trend over the last week," Martin Gilles, an equity strategist at WestLB Panmure in Frankfurt, told CNNfn.com.
"On the other side, we have a quite positive reaction in rest of 'new economy' stocks due to the strong performance on the Nasdaq," Gilles added, referring to telecom, media and technology stocks often referred to as "new economy" issues. "In our view, an investor should have a focus on cyclical, technology and to some extent financial stocks," he added.
In the currency market, the euro slipped against the dollar at 91.32 U.S. cents, compared to 91.69 U.S. cents in late New York trading Thursday. The common currency was little changed after a report showed euro-zone inflation remained at 2.4 percent in July.
German cell license auction lingers
In Amsterdam, shares of Dutch telecom KPN sank 5.6 percent after Hong Kong's Hutchison Whampoa pulled out of the E-Plus consortium that won a license in Germany's third-generation mobile phone auction, which ended on Thursday, citing the high cost of the victory. The auction's six winners agreed to pay a combined $46 billion for the licenses, which will allow cell-service providers to offer Internet-related services through mobile phones.
FTSE index heavyweight Vodafone AirTouch (VOD), fresh off its winning bid, fell 0.7 percent, while CAC 40 heavyweight France Telecom, whose affiliate was also one of the winners, dropped 5.1 percent, making it the top loser on the CAC 40.
Germany's most-valuable company, Deutsche Telekom (FDTE), whose T-Mobil unit also was a victor, fell 2.2 percent. Finland's Sonera, which also was part of an alliance that won a license, fell 2.1 percent early in Helsinki.
Spain's Telefonica, partner of Sonera, fell 1.3 percent.
Among upbeat telecom stocks was British Telecom (BT-A), up more than 3 percent, after the Wall Street Journal reported the U.K. phone company has held exploratory talks about a merger with U.S. joint venture partner AT&T. BT declined comment.
France's Alcatel (PCGE) rose 2.8 percent in Paris, while Tele Danmark rallied 5.3 percent in Copenhagen after the French networking equipment maker announced a 210 million euros ($193 million) purchase of the Danish telephone company's marine division, which helps lay telecommunications cables on the ocean floor.
European telecom equipment stocks climbed on hopes that mobile operators, eager to recoup the steep cost of securing German mobile phone licenses, will race to build networks.
Finland's Nokia jumped 4.4 percent and Sweden's Ericsson climbed 1 percent.
Mobile phone chip designer ARM Holdings (ARM), up 3.5 percent, STMicroelectronics (PFTE) climbed 1.9 percent, and German rival Infineon Technology (FIFX) rose 2 percent in Frankfurt.
Shares of technology bellwether Siemens (FSIE) rose 2.3 percent in Germany, to top the leader board.
Dutch network operator Equant (PEQU), which is listed in Paris, led CAC gainers, up 3 percent.
Indigestion about a competitor's bid? 
Food and beverage company Allied Domecq (ALLD), parent of the Baskin-Robbins ice cream chain, pared earlier losses, declining 0.4 percent, after rivals Diageo (DGE) and France's Pernod Ricard (PRI) announced they would bid jointly for the flagship liquor business of Canada's Seagram Co., which is being pared off as part of its merger with French media company Vivendi (PEX).
Shares of Diageo fell 1.8 percent but Pernod Ricard rose more than 3 percent in Paris.
Among strong technology stocks in London, information technology firm Sage Group (SGE) rose 3 percent.
Outside of the FTSE 100, shares of QXL.com rose 0.8 percent after the U.K.-based Internet auctioneer cut its offer for German rival Ricardo.de by 74 percent, apparently due to Ricardo's weaker-than-expected revenues.
Shares of the two companies tumbled in the wake of their original deal. The revised bid, which has been approved by Ricardo shareholders, is worth about $256.4 million, down from about $994 million when the merger was unveiled in May. Ricardo rose 6.3 percent on Germany's Neuer Markt.
Britain's Cantab Pharmaceuticals (CTB) sank 8.4 percent. Citing industry sources, Reuters reported drug company Glaxo Wellcome (GLXO) is likely to give up its right to market one of two herpes virus vaccines that Cantab is developing in order to appease U.S. regulators as part of Glaxo's planned merger with SmithKline Beecham (SB-). 
--from staff and wire reports
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