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London refuses to buckle
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November 16, 1999: 5:14 a.m. ET
U.K. blue chips buck mild deficits in Europe, lifted by telecom, bank stocks
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LONDON (CNNfn) - London bucked the losing trend in Europe Tuesday morning, as other markets notched up modest losses ahead of a U.S. interest rate decision later in the session.
London's FTSE 100 stood 21 points higher at 6,554.5, with the telecom and banking sectors providing most of the uplift. Europe's largest blue-chip index was the only one to stand in positive territory.
In Paris, the CAC 40 treaded water after making modest opening losses to trade down 24 points at 5,154.26, a loss of almost 0.5 percent, after yet another record close in the previous session.
Frankfurt's Xetra Dax slipped further into the minus column, as it fell 42 points to 5,817.62, a loss of 0.7 percent, despite strong gains from two blue-chip stocks.
Losses also mounted on the SMI in Zurich at it slid 30 points, or 0.4 percent, to 7,386.0.
The euro was little changed from its New York close against the dollar as it stood around $1.034 in early European trading. The single currency also recovered against the yen to trade at 108.70 yen after it hit a two-month low against the Japanese currency Monday of 107.62 yen.
The downbeat sentiment reflected the cautious mood on Wall Street in Monday's session, as both the Dow Jones industrial average and the Nasdaq composite closed just inside the red. Investors pulled back ahead of the meeting of the U.S. Federal Reserve's Open Market Committee later Tuesday. Economists are split on whether the key borrowing rate will move higher.
Wall Street looked set for a flat open Tuesday, with S&P 500 futures down 0.9 points on the Globex trading system at 1,402.10. London brokers calculated fair value, which takes into account the effect of dividend payments and interest costs, at 1,400.41.
The FTSE Eurotop 300, a wider of gauge of pan-European sentiment, lost 3.4 points to 1,408.26.
Telecom stocks were again to the fore in London. Vodafone AirTouch (VOD) hogged the limelight again Tuesday, as it continues to contemplate launching the world's largest hostile bid in history for Germany's Mannesmann (FMMN).
The U.K.-based cellular giant reported underlying operating profits up 28 percent Tuesday to 1.3 billion pounds ($2.1 billion) for the six months to the end of September. The shares pared earlier gains of more than 1 percent, however, to trade just 0.3 percent higher as investors worried that an expensive hostile bid for Mannesmann will drive a hole in future earnings.
Other telecom stocks hitched a ride as merger speculation continued to swirl around the sector. Orange (ORA), the target of a $36 billion friendly takeover by Mannesmann, was up 1.4 percent as investors bet that a rival bid might yet emerge for the U.K.'s No. 3 cellular network operator.
Cable & Wireless (CW-) jumped 2.2 percent after a report linked it to a bid from Hong Kong-based conglomerate Hutchison Whampoa
U.K. banking stock were also strong, with heavyweight Lloyds TSB (LLOY) up 1.1 percent and Barclays (BARC) 1.6 percent ahead.
In Frankfurt, steel and engineering giant ThyssenKrupp (FTHY) soared 11 percent after announcing a major restructuring, aimed at tripling pretax income in the "medium term."
Mannesmann was one of the few other gainers in Frankfurt with a rise of 2 percent.
Financial stocks weighed on the index ahead of the U.S. interest rate decision. Deutsche Bank (FDBK) fell 2 percent, its nearest rival HypoVereinsbank (FHTM) was down 2.8 percent and Dresdner Bank (FDRB) shed 2.2 percent.
Market heavyweight Deutsche Telekom (FDTE) was also 2 percent lower.
In Paris, telecom stock Equant (PEQU) remained the top gainer, although it came back from earlier highs of more than 5 percent, to trade up 3.5 percent.
France Telecom (PFTE) in contrast shed 2 percent.
Diversified utility Vivendi (PEX), which also has a big telecom unit, was up just 0.8 percent after it reported a 27 percent rise in nine-month revenue to 28.5 billion euros ($29.4 billion).
-- from staff and wire reports
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