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Europe bounces on techs
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March 20, 2000: 12:54 p.m. ET
Telecom, media and tech shares drive bourse gains on quiet trading day
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LONDON (CNNfn) - Europe's leading equity markets finished with firm gains Monday in subdued trading as technology, media and telecom stocks marked their second straight session of strong gains following last week's heavy losses.
London, Paris and Zurich climbed about 1 percent, while Frankfurt shot up 2 percent, helped by a jump in Deutsche Telekom and a pair of high-tech bellwethers.
Sharp rallies in British news and information provider Reuters and French chipmaker STMicroelectronics typified the resurgent appetite for so-called "new economy" stocks.
But analysts cautioned against reading too much into Monday's advances, which came against a backdrop of relatively low trading volume a day before the U.S. Federal Reserve will render its latest interest-rate verdict. Traders Monday discounted an expected quarter-percentage-point rate hike.
"Volumes are not great enough to say that people are feeling confident at the moment," said Jerry Evans, equity strategist at Enskilda Securities in London. Evans said he believed the brunt of last week's huge movements out of new economy issues and into more traditional sectors had been driven largely by market makers rather than by volume and that the "true believers" had never abandoned faith in the technology and telecom sectors.
The benchmark FTSE 100 in London ended up 66.5 points, or 1 percent, at a nine-week high of 6,624.5, off session highs. The gains were helped by buoyancy in high-profile media and telecom shares, with each sector contributing about 25 points to the blue-chip advance, and by an early rally on the Dow Jones industrial average that defied expectations for an opening dip. Total market volume in London was just over 1.4 billion shares, one of its lowest levels so far this year.
In Paris, the CAC 40 closed up 0.9 percent at 6,360.90, lifted by impressive gains in high-profile tech issues such as network operator Equant (PEQU), pay-TV broadcaster Canal Plus (PAN) and red-hot semiconductor firm ST Microelectronics (PSTM).
Frankfurt's electronically traded Xetra Dax vaulted 2.1 percent, or 161.46 points, to close at 7,872.38, propelled by sparkling performances in business software maker SAP [FSE:FSAP3] and tech bellwether Siemens (FSIE). The SMI in Zurich gained just under 1 percent, or 66.3 points, to close at 7,166.9, while the Aex exchange in Amsterdam and the Ibex-35 in Madrid both ended flat.
The pan-European FTSE Eurotop 300, a broader index that offers a snapshot of the regional mood, ended up about 1 percent at 1,624.14. Electronics components jumped nearly 6 percent, the information technology and computer segments added 5 percent each, and media issues tacked on 3 percent, offsetting declines in aerospace and defense, water, automobile and insurance stocks.
The euro was quoted at $0.9703 in late trade Monday, off an earlier level of $0.9746, its highest since March 2.
Media stocks drive London
In London, news and information provider Reuters Group (RTR) led gains on the FTSE 100, shooting up 14.8 percent after shares of its 62 percent-owned Tibco Software unit rose in the U.S. Friday. Reuters was among the prominent casualties of last week's shift out of new economy stocks, but the shares still closed on Friday 52 percent higher than their end-1999 level. Basking in Reuters' glow, British Sky Broadcasting (BSY), the commercial broadcaster that's 40-percent owned by Rupert Murdoch's News Corp., jumped 3.4 percent, while media conglomerate Pearson (PSON) raced up 9.2 percent.
After showing strength through much of the session, bank stocks lost some steam late in the session amid concerns voiced in a government-sponsored report that lambasted the industry for allegedly overcharging customers by as much as 5 billion pounds ($7.87 billion) a year. Lloyds TSB (LLOY) ended 0.2 percent lower as the report raised the prospect the government will tighten regulation of the industry. Barclays (BARC) advanced 0.7 percent, Royal Bank of Scotland (RBOS) added 0.9 percent, Abbey National (ANL) ended unchanged at 760 pence and HSBC Holdings (HSBA) eased 0.3 percent.. Bucking the trend, Bank of Scotland (BSCT) gained 5 percent.
Telecom heavyweight Vodafone AirTouch (VOD) rose 3 percent, while Telewest (TWT) vaulted 6.3 percent.
In Paris, new economy stocks sparkled. Pay-television company Canal Plus (PAN) spiked 6 percent, bouncing back after heavy declines triggered by lowered share recommendations by several brokers. Chipmaker STMicroelectronics (STM) surged 9.4 percent and computer services company Cap Gemini (CAPP) rose 3 percent
Network services provider Equant (PEQU) surged 7.3 percent amid a broad rebound in telecom. Equant was helped by speculation that it might be a takeover target, possibly by German colossus Deutsche Telekom. In an interview in the French press, Equant Chairman Didier Delepine said the company is interested in more partnerships along the lines of the Internet venture it unveiled last month with Reuters.
Siemens sparkles
Tech stocks also were key in pushing Frankfurt shares higher. Business software maker SAP [FSE:FSAP3] leapt 7.6 percent following news last week that it plans a new unit, SAPMarkets, to tap into the burgeoning market for business-to-business e-commerce services. SAP's latest rise follows a sharp slump earlier this month. Tech leader Siemens (FSIE) jumped 9.5 percent after it said it plans to merge its automotive systems business with a similar unit owned by Mannesmann (FMMN). Siemens also benefited from a separate deal to purchase Robert Bosch's mobile-phone business.
Automaker BMW (BMWG) rose 2.4 percent. The Quandt family, which owns 40 percent of BMW, denied Monday it is in talks with Ford Motor Co. (F: Research, Estimates) to sell its stake, rebutting a report Sunday in Germany's Welt am Sonntag newspaper that said Ford and BMW had discussed a possible takeover in the past three months.
Pharmaceutical firm Schering (FSCH) advanced 3.9 percent after saying it intends to float its biotechnology business this year and make a special payment to shareholders in 2000. Also providing sharp lift was index heavyweight Deutsche Telekom (FDTE), which spurted 5.6 percent ahead of the expected public floatation next month of its T-Online internet subsidiary.
Spain's Telefónica rose 1.9 percent after a report that the U.K.'s biggest phone operator, British Telecommunications (BT-), may bid for the Spanish company. BT, which declined to comment on the report, ended down 2.3 percent.
Dutch telecom market leader Royal KPN shot up 5.9 percent after it disclosed plans to launch an online travel agency. The stock also got a boost from strong full-year earnings results and a bullish growth outlook for 2000. 
-- from staff and wire reports
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