Sun, Jan 22, 2006 - Page 10 News List

European stock markets fail to hold on to early gains

AP , LONDON

European stock markets failed to hold early gains on Friday, as rising oil prices knocked shares of automakers, Infineon Technologies posted a bigger-than-forecast loss in a surprise announcement and US stocks tumbled in early trading.

The German DAX 30 ended 1.5 percent lower at 5,349, the French CAC-40 index declined 0.7 percent at 4,778, and the UK's FTSE 100 Index fell 0.4 percent at 5,672.

In the US, the Dow industrials tumbled more than 100 points as oil prices hit a fresh four-month high, with disappointing quarterly results from General Electric and Citigroup, and concern over Motorola's profit outlook further undermining sentiment.

Europe's largest technology company Nokia declined 2 percent as Motorola's outlook cast a shadow on the Finnish company's fourth-quarter results, which are due on Thursday.

With crude oil futures vaulting over US$68, automakers such as Volkswagen and DaimlerChrysler pressured the German stock market.

Frankfurt was also hit by Infineon Technologies, which fell 4.6 percent after it reported a quarterly loss of US$222 million, which was more than analysts had forecast, due to weakness in memory chip prices. Infineon wasn't expected to report earnings until next week.

Franco-Italian chipmaker STMicroelectronics, also due to report earnings next week, declined 2.9 percent.

Telecommunications company Swisscom rose 1.3 percent after it said CEO Jens Alder is leaving after clashing with the Swiss government over strategy and acquisitions.

Shire surged 5.9 percent, adding to strong gains earlier in the week, after the pharmaceutical company said late on Thursday that it has settled all pending litigation with Impax Laboratories Inc in connection with Impax's attempt to market generic versions of Shire's Adderal hyperactivity treatment.

LVMH declined 2.5 percent after reporting a 13 percent rise in fourth-quarter revenue.

The company said it had an exceptionally strong end to the year. The company reiterated that it is expecting to report double-digit profit growth from recurring activities last year.

SG Securities downgraded LVHM Friday to sell, saying that sales and profit outlooks should serve to cool consensus expectations.

"Despite solid fundamentals, the share appears fully valued and already factors in our optimistic restructuring scenario," the bank said.

Shares of The London Stock Exchange gained 2 percent to a new high of ?6.875 (US$12.10) following reports that the NASDAQ Stock Exchange is considering bidding for it.

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