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London bucks downtrend
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May 11, 1999: 6:50 a.m. ET
Telecom and tobacco stocks keep FTSE higher; other Europe markets lower
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LONDON (CNNfn) - London was the only major bourse to advance Tuesday morning as investors went bargain hunting after hearing solid economic output data.
Other European markets were down slightly after the Dow Jones industrials ended lower overnight and hopes of a settlement in Kosovo faded.
Softness on Asia's major markets added to the diplomatic and political repercussions from NATO's bombing of the Chinese embassy in Belgrade in guiding most markets lower.
The FTSE 100 in London was up almost 19 points at 6,367.3, a rise of 0.29 per cent, buoyed by a rally in telecom and tobacco shares.
The other main markets moved little from opening losses. The CAC 40 in Paris was almost 12 points lower at 4,335.51, a drop of 0.27 percent.
Germany's electronic Xetra Dax was also maintaining a slight decline, down 17 points at 5,243.79. In Zurich, the SMI extended earlier losses to trade almost 31 points lower at 7,194.9, a fall of 0.42 percent.
Most of the bourses were also affected by the lower close on the Dow Jones industrial average, which slipped 24 points, to 11,007 Monday. But tech stocks got a slight lift from the Nasdaq's higher close.
Early indications are for a slightly higher opening in U.S. markets. The index for S&P 500 futures contacts trading on the Globex trading system was just lower at 1,346.1. London brokers estimated fair value for the S&P futures index to be 1,345.76.
In London, telecom stocks made strong gains as investors went bargain hunting. British Telecommunications [LSE:BT.A] was up 2.63 percent at 1,015 pence, while mobile operators were also up strongly. Orange [LSE:ORA] jumped 2.55 percent at 827 pence, while Vodafone (VOD) was up 2.39 percent at 1,116 pence.
Tobacco stocks also attracted buyers after a favorable ruling in a Tennessee lawsuit Monday. British American Tobacco (BATS) pared some of its earlier gains but was still up 2.26 percent at 540 pence, while Imperial Tobacco (IMT) was up 2.21 percent at 672 pence. The latter stock was also reacting to first-half earnings, which showed pretax profit up 25 percent at 183 million pounds ($298 million), at the top end of expectations.
The biggest gainer in the FTSE 100 was industrial gas producer BOC (BOC), which was up 6.64 percent at 1,100 pence on hopes of a merger with Praxair (PX) of the U.S. and good first-half results.
HSBC Holdings (HSBA) was up 1.23 percent at 2,141 pence a day after the bank announced a $10.3 billion acquisition of Republic New York Corp.
In Germany, the conglomerate Veba (FVEB) was up 4.29 percent at 57.36 euros after it announced it had more than tripled first-quarter profits to 1.36 billion euros ($1.46 billion)
The retailer Karstadt (FKAR) was up 2.65 percent at 414.75 euros after reporting a 21 percent rise in 1998 earnings to 199 million marks ($109 million).
Shares of German sporting goods maker Adidas-Salomon (FADS) slid almost 2 percent to 94 euros after the company said first-quarter pretax profit plummeted 35 percent to 195 million marks ($107 million).
Tuesday could be an important day in Europe's pharmaceutical sector. The boards of Germany's Hoechst (FHOE) and France's Rhône-Poulenc (PRPP) are set to vote on the firm's cross-border alliance. The boards will consider a revised merger proposal under which Hoechst shareholders would end up with a majority stake in the new life-sciences company, Aventis, The Wall Street Journal reported Tuesday.
Hoechst shares were up 0.56 euros at 43.15 in Frankfurt, while Rhône's stock slipped 1.16 percent in Paris to 45.17 euros.
French supermarket chain Carrefour (PCA) was up 0.9 percent at 123.6 euros after Dutch supermarket giant Ahold told London's Financial Times it is in talks with at least one other big European food retailer. Ahold's president, Cees van der Hoeven, said Carrefour met his criteria for linking up with a "thoroughbred" food retailer. Ahold's shares were unchanged in Amsterdam at 35.05 euros.
Among telecom issues, Olivetti's shares were up 0.02 euros at 3.18, after the company said Tuesday it has already held talks with potential partners in its $65 billion takeover bid for Telecom Italia.
--from staff and wire reports
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