European markets power ahead
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March 7, 2002: 8:53 a.m. ET
Imperial lights up markets with $4.6B deal, Publicis to announce $3B U.S. merger
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LONDON (CNN) - European markets held on to early gains at midday on Thursday, supported by tech and telcoms stocks, on renewed signs of economic improvement.
London's FTSE 100 rose 0.9 percent to 5,290.9, while the CAC 40 blue chip index in Paris climbed 1.5 percent to 4,654.70 and Frankfurt's electronically traded Xetra Dax advanced 1.4 percent to 5,356.86.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, rose 1.1 percent, with the information technology, telecom and aerospace sub-sector leading gains.
Analysts say upbeat economic data from both sides of the Atlantic, as well as strong corporate results, have given investors hope that the worst may be over for global markets.
"You can't get away from the fact that things are picking up and will be better by year-end than they are now," Matthew Leeman, a fund manager at Lombard Odier, told Reuters.
"Now that most companies have reported, they all say roughly the same things, that things are not getting any worse."
Imperial Tobacco (IMT), the maker of Embassy and Lambert cigarette brands, is to pay 5.2 billion euros ($4.6 billion) for 90 percent of German rival Reemtsma. Imperial rose 8.7 percent.
Publicis, the French advertising company, was suspended until mid-afternoon as it announced it would buy Bcom3 Group of the United States for about $3 billion. The deal would create the fourth-largest advertising company.
Innogy (IOG), the UK's largest electricity supplier, rose 2.4 percent after the Financial Times said German energy group RWE (FRWE) is poised to raise its £2.8 billion ($4.6 billion) offer for the company.
Technology and telecom stocks got a boost after Wall Street extended its gains on hopes that an economic recovery will increase profits.
France Telecom (PFTE), Europe's second-largest phone company, rose 4.1 percent on hopes a friendly resolution could be found to its spat with German partner MobilCom. Orange (PORA), the mobile phone operator owned by France Telecom, topped the leader board in Paris, rising 4.4 percent.
Europe's chipmakers, STMicroelectronics (PSTM), Infineon Technologies (FIFX) and Philips Electronics, all rose more than 1 percent ahead of a mid-quarter update from No. 1 computer chip maker Intel (INTC: up $0.26 to $32.96, Research, Estimates) to see if company profits can keep pace with global economic rejuvenation.
French Retailer Casino rose 4 percent. The company beat forecasts for earning and operating profit. It also said it would take a 37.6 percent stake in Dutch rival Laurus with an option to increase that to 51 percent.
Rolls-Royce(RR), the world's second largest civil jet engine maker, was up 4.4 percent at midday after it said net income rose 34 percent last year as sales increased and the group cut costs. The London-based group said 2001 net income increased to £106 million ($151 million) from £79 million a year earlier, which beat analysts' forecasts.
Among Europe's smaller markets, Amsterdam's AEX index rose 1.5 percent, while Milan's MIB30 index and the SMI in Zurich added 0.8 percent each.
In the U.S. on Wednesday, a blue-chip surge led the markets higher, as strength in traditional names -- helped by an upgrade from financial services company J.P. Morgan Chase -- transformed into an across-the-board rally after the release of strong economic data.
The Dow Jones Industrial Average rose 140.88 points, or 1.4 percent, to 10,574.29, while the tech-laden Nasdaq composite climbed 1.3 percent to 1,890.40.
Wall Street was expected to open slightly higher later on Thursday. S&P 500 index futures rose 2.1 points to 1,164.6 on the Globex trading system, while fair value, a measure that takes account of interest costs and dividend payments, was calculated at 1,162.79.
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