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European stocks get reliefAugust 13, 2001 Posted: 1639 GMT LONDON (CNN) -- A day of modest gains on European markets gave investors some relief Monday from the string of heavy declines that hit bourses last week. An upbeat assessment of the outlook for semiconductor shares pulled tech-sector players higher, led by UK chip designer ARM Holdings and STMicroelectronics, the French-based No.1 in Europe's microchip industry.
The blue chip CAC 40 in Paris ended up 1.5 percent at 4,920.35, and Frankfurt's Xetra Dax was up 0.6 percent at 5,468.10 in late trading. London's FTSE 100 was little changed at 5,431.1, after earlier rising 0.3 percent. Renewed faith in chipmakers and other high-tech shares stemmed mainly from Goldman Sachs's recommendation to buy U.S. semiconductor stocks such as Intel (INTC: Research, Estimates) in anticipation of a pickup in business later this year. That gave a boost to Intel's European counterparts, such as STMicroelectronics (PSTM), which rose 3.7 percent in Paris, and Infineon Technologies (FIFX), up 0.9 percent in Frankfurt. Netherlands-based Philips Electronics, the third-ranked chip player in Europe, gained 1.9 percent. ARM Holdings (ARM), Europe's biggest chip designer, was one of the best performing stocks on the FTSE 100, climbing 3.7 percent, while ASML, a Dutch maker of semiconductor-manufacturing equipment, rose 1.4 percent. Expectations of rising oil prices gave some of Europe's biggest producers a lift. TotalFina-Elf (PFP) added 3.4 percent in Paris and BP (BP-) of the UK gained 1.9 percent after Saudi Arabia, the world's biggest oil producer, told its Asian customers it was reducing supplies by as much as 17 percent in September after a 10 percent cut in August. Saudi Arabia, along with the other 10 members of the Organisation of the Petroleum Exporting Countries, is cutting oil output by 1 million barrels a day in September to try to prop up crude prices. Brent oil for September delivery rose 25 cents to $26.23 in midday trade on London's International Petroleum Exchange. Commerzbank (FCBK), Germany's third-largest bank by market value, rose 2.4 percent. Der Spiegel magazine said on Sunday the bank is in merger talks with domestic rival Deutsche Bank, Europe's biggest bank, and also with a number of international banks.
French defence and electronics group Thales (PHO), formerly known as Thomson-CSF, rose 3.3 percent after announcing its Thales Optronics unit won a Stocks in the telecom sectors had mixed fortunes, although many of last week's biggest losers staged comebacks of a sort. Nokia of Finland, the world's No. 1 maker of mobile-phone handsets, rose 2.9 percent, while Swedish rival Ericsson gained 1.9 percent. Fellow equipment maker Alcatel (PCGE) rose 2.7 percent in Paris. Among network operators, Bouygues (PEN) closed up 2.7 percent, and in London, cable company Telewest Communications (TWT) added 2.1 percent. But other telecom shares failed to shake off last week's blues. Energis (EGS) and Colt Telecom Group (CTM) both lost about 3 percent in London, while Paris-listed mobile phone network Orange (OGE) was down 0.9 percent. German heavyweight Deutsche Telekom (FDTE), which has seen its value sink by about 20 percent in less than a week, was down another 1.5 percent late in the day. UK telecom equipment maker Marconi (MONI), another heavy faller in recent weeks, shed 5.5 percent as traders cited concerns that the company's increasingly cash-strapped customers will delay more orders for network gear. A bleak economic outlook prompted investment bank Morgan Stanley Dean Witter to lower its rating on EADS (PEAD) to "underperform" from "neutral", and set 12-month price target of "We believe that the valuation will not be sustained as confidence over the outlook for civil aircraft deliveries deteriorates," MSDW analysts wrote in a note to investors. "We believe confidence in the Airbus order book has been shaken by a cut to the 2003 delivery forecast." In Amsterdam, the AEX index rose 0.4 percent, the SMI in Zurich jumped 1.3 percent, and Milan's MIB30 index was little changed from Friday's close. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 0.5 percent, with its information technology and oil sectors both recording respectable gains.
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360 million contract from the British Ministry of Defence.