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Bourses edge higher
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July 28, 1999: 6:16 a.m. ET
Bank earnings help firm European markets on back of Wall Street recovery
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LONDON (CNNfn) - European markets posted modest gains in morning trading Wednesday, with a string of positive earnings helping bourses extend a rebound after a week-long decline.
European investors were also encouraged by a firmer performance in Asian markets, the 1.1 percent climb Tuesday in the Dow Jones industrial average and the 2.3 percent rise on the Nasdaq. U.S. markets were expected to open higher, with Globex S&P futures trading at 1,366.20 and fair value quoted at 1,370.26.
In London, the benchmark FTSE 100 index added 24 points or 0.39 percent at 6,267.0 in a mixed opening where gainers and losers were evenly matched.
In Frankfurt, the Xetra Dax made a similar advance, adding 17 points or 0.33 percent at 5,241.65 as the bank earnings season drove up the index's financial heavyweights.
The CAC 40 in Paris started more sluggishly, trading just 2 points higher at 4,427.90 while the SMI in Zurich pushed 41 points ahead to 6,859.4.
The FTSE Eurotop 300 of the largest pan-European shares added 5 points at 1,279.24, hinting that the mini-rally of recent days has some depth. While volumes remain thin, strong gains in auto, media and drug stocks lifted the index.
London advanced on a mix of first-quarter earnings news and the legacy of recent corporate activity. Drinks firm Cadbury Schweppes (CBRY) added 0.71 percent after reporting a 3.8 percent advance in first quarter profits while insurer CGU (CGU) rose 0.77 percent after announcing a 21 percent climb in new policy volume in its first quarter.
British Telecommunications (BT) added 0.81 percent ahead of its own results, due out Thursday. Securicor (SCR) which sold its 40 percent stake in cellular operator Cellnet to BT Tuesday, gained another 1.6 percent.
Other cellulars also did well, with Vodafone Airtouch (VOD) adding 0.53 percent and Orange (ORA) ahead by 0.76 percent.
Cable operator Telewest (TWT), punished by investors after losing out in the race for the residential assets of rival CWC, bounced back with a 4.25 percent rise.
News group Reuters (RTR) was up 2.93 percent a day after its Instinet trading platform unit unveiled plans to acquire a 16.4 percent stake in U.S.-based Archipelago Holdings.
Among the losers, cable satellite market leader BSkyB (BSE) was down 0.35 percent after tax authorities ruled that its plan to give away free set-top digital TV decoder boxes would be subject to value-added tax.
In Frankfurt, earnings in the bank and auto sectors were at the fore. BMW (FBMW) was up 0.6 percent after posting a 26.8 percent decline in first-half profit but tempered the news with expectations of a "substantially improved" outlook in the second half.
BMW attributed the slump to restructuring costs at its troubled U.K. Rover plant, which the parent has spent billions of marks trying to resuscitate. Sales of Rover cars tumbled 33 percent, while overall BMW group sales climbed 3.3 percent.
Rival Volkswagen (FVOW), Europe's largest automaker, was up 1.6 percent. On Tuesday, Volkswagen gained 1.8 percent after reporting a mild 1.4 percent rise in first-half earnings late Monday. DaimlerChrysler rose 1.5 percent at 79.977 euros.
Deutsche Bank (FDBK) operating profits rose 19.2 percent rise in the first half, in line with expectations. Net income rose 45.1 percent to 1.8 billion euros and Deutsche stock was up 1.1 percent.
Dresdner Bank (FDRB) and Commerzbank (FCBK), which are due to report later this week, were up 2.2 and 1.7 percent, respectively.
Bank stocks also boosted the CAC in Paris. Paribas (PPM) reported a 57 percent leap in first-half profits to a record 1.01 billion euros, boosting its shares by 1.8 percent. Prospective merger partner Société Générale (PGLE) rose 0.57 percent and BNP (PBNP), which aims to buy both with a rival offer, gained 1.03 percent.
--from staff and wire reports
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