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Media shares lift London
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January 24, 2000: 1:15 p.m. ET
Europe's biggest market ends higher on telecom, media hopes; other markets sag
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LONDON (CNNfn) - London's leading stock indicators ended on higher ground for the first time in five sessions Monday, aided by demand for media stocks such as music group EMI and British Sky Broadcasting and telecom shares. Paris closed marginally higher on high-tech strength, while Frankfurt and Zurich both slumped.
Telecom and media stocks made some of the most impressive strides of the day as bid talk swept both sectors. EMI's proposed $20 billion merger with Time Warner reinforced investors' hopes for more media-related consolidation; the proposed merger comes just two weeks after AOL and Time Warner announced a proposal to create the world's largest media company.
The benchmark FTSE 100 in London finished up 33.5 points, or 0.5 percent, at 6,379.8, but below triple-digit gains recorded earlier in the day just before the opening bell on Wall Street. In Paris, the CAC 40 closed up 0.17 percent, or 9.54 points, at 5,690.86, wiping out most of its early gains despite support from media and Internet-related stocks.
The electronically traded Xetra Dax closed down 0.9 percent at 6,931.99, weighed down by losses in index heavyweight Deutsche Telekom. The Swiss Market Index slid 108 points, or 1.5 percent, led by sharp losses in pharmaceutical giants Roche, Novartis, Clariant and Ciba.
The FTSE Eurotop 300, a broader index that reflects the overall regional mood, ended up 0.47 percent at 1,523.87.
In Europe's biggest market, London, the FTSE 100 recouped a small portion of the 312-point loss it suffered last week when interest rate worries gnawed at investors' fragile confidence. Monday's half-percent rise was also well short of the nearly 2-percent gain the index had posted midway through the trading session, when investors were pinning their hopes on a Wall Street recovery in the wake of its heavy losses last week. The Dow was down 50 points when London markets closed Monday.
C & W rings up sharp gains
Leading the blue-chip advance on the FTSE 100, telecom giant Cable & Wireless (CW-) raced up almost 14 percent. Investors cheered news that the firm is in talks that could lead to a merger of its wireless unit - C&W HTK - with Singapore Telecom. C&W stressed, however, that the outcome of the talks on a proposed merger of equals was still uncertain. More than 28 million C&W shares changed hands.
EMI Group (EMI) soared 11.2 percent after unveiling the latest media-related megadeal involving U.S. entertainment giant Time Warner (TWX). The companies announced a tie-up that will spawn one of the music industry's biggest players.
The deal galvanized trading in related sector stocks, as investors salivated over the prospects for further courtships among media companies two weeks after America Online (AOL) agreed to buy Time Warner in a watershed deal for the emerging world of digital media.
Shares in British Sky Broadcasting (BSY), the U.K. media group that is 40-percent owned by Rupert Murdoch's News Corp., leapt 13.4 percent. The gain was inspired by in-line subscriber figures at cross-channel French rival Canal Plus (PAN), after it posted a 17 percent jump in 1999 subscriber numbers Monday to 13.6 million. BskyB has forecast strong subscriber growth itself. Canal Plus stock advanced 1.7 percent in Paris.
Communications network provider Energis (EGS) jumped 3.4 percent amid talk of a possible bid approach from Mannesmann (FMMN), which is probing ways to fend off an unsolicited takeover onslaught from Britain's Vodafone AirTouch (VOD). Mannesmann shares closed 0.3 percent lower in Frankfurt.
In London, retail pharmacist Boots (BOOT) surged 10.6 percent on weekend press reports of possible bid interest from U.S.-based Walgreen - another possible sign of consolidation in the European retail sector.
Among financial issues, NatWest (NWB) advanced 4 percent after publishing its final statement as it tries to fend off two hostile takeover approaches. The bank reported a 16 percent jump in 1999 pre-tax profit to 1.79 billion pounds, raised its dividend 25 percent, and increased the amount of money it proposes to return to shareholders. Lloyds TSB jumped 4.9 percent.
Gains in Frankfurt were punctuated by a 4.6 percent spurt in business software publisher SAP [FSE:FSAP3], reversing early losses, after the company earlier reported an 18 percent rise in full-year profit, but said it would take a 150 million-euro charge to fund an employee stock plan. SAP was seen as benefiting from enthusiasm over its forecasts for strong growth this year in its e-commerce Internet portal, mySAP.com, which it recently launched.
Technology and engineering firm Siemens (FSIE) added 2.7 percent after it posted better-than-expected first-quarter profits, which almost doubled. Index heavyweight Deutsche Telekom (FDTE) shed 3.7 percent, building on last week's losses , which came after reports that the company had alerted certain analysts of a profit crunch this year.
In Paris, industrial gas producer Air Liquide (PAI) rose 4.6 percent, after it said its acquisition of assets from Britain's BOC would be completed by March. A planned tie-up between Reuters and data network provider Equant [PA:PEQU] helped lift the latter's stock 3.1 percent.
Oil giant TotalFina (PFP) advanced 2.6 percent, supported by continuing strength in oil prices earlier in the day.
In Zurich, specialty chemical maker Clariant slid 4.2 percent amid concerns that its proposed takeover of Britain's BTP (BTP), at a price of 600 pence per share, could dilute the firm's earnings. Ciba slid nearly 2 percent, Novartis lost 1.8 percent and Roche retreated 1.3 percent.
In the currency markets, the euro slid close to parity with the dollar after the weekend meeting of the Group of Seven industrialized nations in Tokyo failed to produce a statement in support of the single currency. The euro hit a session low of $1.0015 in Asian trade before improving slightly to $1.0026 by late Monday in Europe.
Bond markets absorbed a 1.1 percent rise in German producer prices for the year to November, the gain proving to be in line with expectations. Bond prices firmed a little, with the benchmark 10-year bund yielding 5.561 percent. 
--from staff and wire reports
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