European Midday Update: Markets Rise Despite Friday's Wall Street Drop

LONDON -- Given Wall Street's wretched performance Friday, it came as no great shock that London's markets struggled from the start. By midmorning the FTSE 100 was down 90.6 to 6378.4. The Techmark index of tech stocks was down 24.1 to 3730.4.

Most of Monday morning's action was in the media sector. All eyes are on United News & Media (UNEWY) as the market hears that Granada Media is preparing a hostile bid for the company at 12 per share ($18.24) if the company refuses to sell its main TV assets to Granada. Granada is also understood to have ruled out making an offer for Carlton Communications (CCTVY), the U.K.'s other major TV group.

United News' share price roared up to 995p in early trading, but slipped back to stand 14p higher on balance at 972. Carlton Communications shed 12p to 790 and Granada Media moved up 5p to 582.

In the pharmaceutical sector, investors appeared nervous ahead of earnings statements from Smithkline Beecham (SBH) (Tuesday) and Glaxo Wellcome (GLX) (Thursday). The merger partners are both under pressure, with Smithkline down 19p at 785 and Glaxo 49p down at 17.50.

These should be Smithkline's last results before it teams up with Glaxo this summer. The focus will then be on the company's big products: Paxil, for depression, and Augmentin, an antibiotic. Look for Avandia, a diabetes drug that is expected to become a blockbuster. As for Glaxo, the market will be looking for news about the performance of Relenza, for influenza, and Lotronex, for irritable bowel syndrome.

The telecom sector was distinctly mixed. Vodafone AirTouch (VOD), which on occasions distorts the Footsie because of its weighting, dipped 5p before coming back to stand just a penny cheaper at 295. Credit Lyonnais is recommending the stock this morning. British Telecom (BTY) was a shade cheaper at 896 and Cable & Wireless (CWP) eased 27p to 12.98 as the Deutsche Telekom (DT) offer for VoiceStream (VSTR) was made official and hopes that Deutsche will buy the U.K. telco recede.

Deutsche Telekom fell 1.47 euros to 53.80 ($50.38) after the announcement that it will cost Deutsche Telekom $50.7 billion to acquire the U.S. mobile concern.

Most of Europe's major stock markets were higher, with the CAC 40 in Paris up 32.42 to 6496.54 and the Xetra Dax in Frankfurt up 7.04 to 7380.30. The Neuer Markt's tech-heavy Nemax 50 index was 37.3 higher to 6286.6.

France Telecom (FTE) rose 4.00 euros to 146.50 and Telefonica (TEF) climbed 0.25 euro to 24.76.

In Frankfurt, software maker SAP (SAP) rose 3.73 euros to 251.35, but DaimlerChrysler (DCX) dropped 1.06 euros to 58.00 amid concerns about the carmaker's upcoming second-quarter figures.

HypoVereinsbank fell 4.20 euros to 64.00 after announcing it would take over Bank Austria, that country's largest bank. The merged bank will be a major player in Eastern Europe. Midmorning, Bank Austria shares trading in Frankfurt were up 6.15 euros to 61.15.

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