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Dow boosts bourses
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March 25, 1999: 12:57 p.m. ET
Wall Street's robust start helps European markets consolidate gains
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LONDON (CNNfn) - Europe's bourses shrugged off a miserable first half of the week to end Thursday in the black with any remaining jitters cast aside as the Dow Jones industrial average headed firmly higher in morning trading.
Investors were unfazed by NATO's Yugoslavia action, concentrating instead on a sharp recovery in Tokyo stocks.
Wall Street's robust performance Thursday in early trading helped lift the mood of investors further as buyers returned in droves. The Dow was up 144 points at 9,811 within the first two hours of trading.
London's FTSE 100 made steady gains throughout the session, to end up 1.14 percent at 6,085.0, a rise of almost 68 points.
Germany's electronically-traded Xetra Dax ended 66 points higher at 4,863.81, a rise of 1.39 percent.
French and Swiss stocks put in even stronger performances. In Paris, the CAC 40 put on almost 2 percent to close at 4,137.01, up 79 points. Swiss blue chips jumped by a similar margin. The SMI index ended Thursday 133 points higher at 7,082.2.
The biggest gainer in London was nuclear generator British Energy (BGY). The shares soared a massive 12 percent to end at 595 pence, after a raft of analyst recommendations upgrades. Investors are also anticipating a share buyback if a key deal to buy a number of conventional U.K. power stations is blocked.
The next best blue-chip gainer was British Airways (BAY). Analysts could not explain the 7 percent rise in the shares to 420 pence. The shares were marked down quite sharply in the past few days on fears over increased aviation fuel prices and the prospect of military action.
Engineering group BTR Siebe (BSBE) was up just under 3 percent at 279 pence on a report in the Financial Times that it would raise up to 1.9 billion pounds ($3.1 billion) from the disposal of its automotive and paper technology businesses.
LucasVarity (LVA) shares were virtually unchanged at 286 pence as investors ignored the 1998 earnings. These are the last before the group is taken over by TRW (TRW). The bid is expected to close in the second quarter.
Renault (PRNO) was the stellar performer in Paris. The automaker put on 2.39 euros to 33.89, a jump of 7.6 percent, amid reports that its chairman Louis Schweitzer was in Tokyo ahead of Nissan's board meeting this weekend. The French carmaker has made it clear it is interested in taking up to a 40 percent stake in the struggling Japanese company.
Renault's stock was also helped by better news from Europe's largest car maker Volkswagen (FVOW). The group said it expected U.S. units sales to jump 20 percent in 2000. Volkswagen leapt 6.6 percent to 59.50 euros in Frankfurt after heavy selling pressure Wednesday.
Other car stocks also benefited. DaimlerChrysler rose 1.50 euros to 79.75, while BMW (FBMW) put on 27.5 euros to 655.
Tech stocks were also strong in Paris. ST Microelectronics (PSGS) was up over 7 percent at 88.45 euros, Legrand (PLR) put on more than 5 percent to 194.6 euros and Cap Gemini (PCAP) was up just under 4 percent at 144.
Dutch-Belgian financial giant Fortis ended the session 1.32 percent higher at 34.45 after getting market down in morning trading in Amsterdam. The company's 1998 results came in below expectations. Net profit excluding one-time items were up 20 percent at 1.58 billion euros ($1.73 billion).
In Frankfurt, SAP [FSE:FSAP3] fell 2 euros to 274, after the business software group issued a profit warning Thursday.
The shares of Germany's second-largest bank, Bayerische HypoVereinsbank (FBVMB) ended 0.15 euros higher at 56.53 after it called in independent auditors to investigate last year's merger which created the group.
Shares in German utility giant Veba (FVEB) dipped 0.94 euros to 49.48, after the company reported a 5.9 percent drop in 1998 pretax profit but announced plans to buy back 10 percent of its shares.
In Zurich, the world's largest cement maker, Holderbank unveiled a two-stage program to raise capital for future expansion. The announcement came as the company posted a 10.3 percent rise in 1998 net profit, at the low end of expectations. The shares closed up 16 francs at 1,602.
A big shake-out may be imminent in the telecom sector. Global One, a telecommunications consortium grouping Sprint (FON), France Telecom (PFTE)and Germany's Deutsche Telekom (FDTE), is near collapse and could be dissolved within the next six weeks, the New York Times reported Thursday. In a statement however, Deutsche Telekom said it was happy with the way Global One was developing.
The move could make Sprint an attractive takeover target by another telecom company and pave the way for Deutsche Telekom to strike out on the acquisition trail, the newspaper said. Global One was founded in 1996 as a vehicle for providing multinational companies with integrated telecom services.
Deutsche Telekom shares were up 1.28 euros at 38.01 in Frankfurt, while France Telecom was up over 2 percent at 75.50.
Swedish mobile phone giant Ericsson announced Thursday it had ended a legal dispute with Qualcomm (QCOM) and agreed to buy the U.S. company's wireless technology unit. The shares surged 7 percent to 188 crowns, having put on over 9 percent earlier in the session.
--from staff and wire reports
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