European Midday Update: Markets Take a Breather

LONDON -- Compared to Tuesday's storming session, Wednesday's activity looked decidedly listless. As investors' appetite for bargain hunting wore off, a subdued FTSE 100 stood 13.40 points higher at 6426.30. The mood extended to the Techmark 100, which was up a more modest 12.20 points to 3189.41.

"Given the sharp rise, it's not coming off as much as you would expect", said one trader at a French bank. "The fact that Vodafone (VOD) is holding up is a good sign."

Overall, the market was very quiet. Telcos remained at the vanguard of activity following a robust set of results from Cable & Wireless (CWP). The company announced a first-half pretax, pre-exception profit in line with expectations, but what really enthused investors was its pledge to increase revenue in its target market by 15% to 20% in the next few years. The shares rose 4.9% to stand at 892p ($6.24).

Encouragingly, Vodafone, whose positive results inspired Tuesday's rally, added a further 3p to 265.5. Brokers were impressed by the company's presentation and issued a barrage of upbeat notes. Lehman Brothers reiterated their buy rating on the stock. "Vodafone's strong interim results and impressive analysts meeting supports our view that not only does Vodafone occupy a unique position in global [telcos] but that its management can execute on this opportunity."

Meanwhile, its harried rival British Telecom(BTY) rose to an intraday high of 705, before slipping 1.5p in the red to 696.5 following a bearish note from Nomura. Elsewhere, alternative carrier Colt Telecom (COLT) added 37p to 17.76.

Technology stocks were mostly higher in the wake of the Nasdaq Composite Index's storming 5.8% rise. Misys(MUSJF) added 33.5p to 679.5, to march straight to the top of the leaderboard after releasing an encouraging trading statement. The computer systems developer confirmed that full-year results are in line with expectations, adding that Y2K problems no longer hamper progress. An upgrade from Nomura to buy from hold provided an additional boost.

Enthusiasm for Bookham Technology (BKHM) was undimmed. Shares in the optical-component maker rose 9p to 16.09, albeit on scant volume.

Europe's other major stock markets were mixed Wednesday, as the CAC-40 in Paris gained 58.9 to 6284.9 and the Xetra Dax in Frankfurt was off 27.1 to 6939.6. The Neuer Markt's tech-heavy Nemax 50 index moved 32.8 lower to 3939.2.

Blue-chip tech shares were mixed, as STMicroelectronics (STM) rose 1.85 euros to 53.75 ($46.10), Infineon (IFX) was unchanged at 47.51 euros and SAP (SAP) fell 1.64 euros to 212.61.

Telecom shares were able to build on Tuesday's solid gains, as France Telecom (FTE) rose 1.90 euros to 117.30, Deutsche Telekom (DT) was up 0.27 euro to 41.22 and KPN (KPN) rose 0.08 euro to 19.19.

Carmakers were lower, as DaimlerChrysler (DCX) fell 2.20 euros to 52.50, as dumpy Chrysler continued to weigh on the organization and Volkswagen (VLKAY) dipped 0.16 euro to 58.24.

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