Sun, Sep 21, 2003 - Page 10 News List

Europe's markets falter; telecoms lose

BLOOMBERG AND AFP , LONDON

European stock markets faltered at the end of the week Friday in the face of profit-taking and a lackluster opening on Wall Street.

The London FTSE 100 index, dragged down by telecoms and financial issues, gave up 1.34 percent to end the session at 4,257. In Paris the CAC 40 lost 1.21 percent to finish at 3,373.64, while in Frankfurt the DAX was off 0.92 percent at 3,578.7 at the end of the session.

The DJ Euro Stoxx 50 had fallen 1.04 percent by the end of the day to 2,532.99. The euro took advantage of a surge in the yen against the dollar and scored its own big gains against the greenback, trading at US$1.1342 in late-day deals against US$1.1256 in New York late on Thursday.

The market was choppy with index futures, index options and options on stocks all expiring, in what's called triple witching on Wall Street, which means more active trading as these investments must be redirected.

Trading was hesitant in the absence of fresh economic data, as Wall Street assessed the after-effects of Hurricane Isabel on the eastern seaboard.

In London, telecoms were under pressure following the sale by the Dutch government to Citigroup Global Markets of its interest in telecommunications operator KPN.

BT Group declined 1.9 percent to 181.5 while Vodafone gave up one percent to end the week at ?1.235.

Financial issues, after a strong showing earlier in the week, weakened on renewed fears about the durability of the US recovery.

Barclays was down 1.09 percent at 497.5. Lloyds TSB gave up 1.4 percent to finish at 433.

In Paris the electronics and defense group Thales fell 2.13 percent to 25.87 euros on a denial from the European defense concern EADS that it planned to acquire the group.

Automaker Renault gave up 3.58 percent to reach 56.50 euros after announcing the recall of 230,000 Laguna models for a mechanical problem.

Elsehwere in Europe, share prices fell 0.07 percent to 26,178 in Milan, 1.29 percent to 7,102.1 in Madrid, 1.06 percent to 334.82 in Amsterdam and 0.57 percent to 2,109.88 in Brussels.

The Swiss Market Index of London-quoted issues finished at 5,387.10 points, a loss of 0.65 percent.

Analysts surveyed by JCF Group in London forecast an increase of 42.3 percent in earnings per share for Stoxx 50 companies this year, compared with an 18.2 percent drop last year. Job cuts helped boost income an average 72 percent at the 35 Stoxx 50 companies that report second-quarter earnings.

"We expect European economic growth will come in the wake of growth in the US," said Guillaume Joncheres, head of equities at Credit Lyonnais Asset Management, with the equivalent of US$80 billion under management. "The US and European markets rebounded at the same time, but the amplitude in Europe was less. This difference should disappear, and Europe will benefit."

Bayer AG, Germany's second-largest drugmaker, jumped 4.9 percent this week after a US court on Wednesday denied class-action status for injury claims involving its withdrawn Baycol cholesterol drug.

The US District Court in Minneapolis ruled in favor of the Leverkusen, Germany-based company, which claimed a class-action case would have been "unmanageable."

That leaves Bayer free to negotiate settlements in individual cases. The company has won only two Baycol cases that went to trial.

Energy stocks fell this week, led by BP Plc and Royal Dutch Petroleum Co, as the price of crude oil slid after a Saudi Arabian official said OPEC probably won't change production quotas next week and the IMF said oil prices will decline by more than 10 percent next year, hurting revenue for producers.

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