European Closing Update: Markets Mixed Ahead of Fed Meeting

LONDON -- Compared with Tuesday's remarkable performance in Europe and the U.S., today's activity was decidedly restrained. The mood of unbridled optimism and appetite for bargain hunting had subsided, and markets decided to return to a wait-and-see approach ahead of the Federal Open Market Committee's meeting.

In London, the FTSE 100 recovered from an early morning stumble to gather a degree of momentum, closing 19 points higher at 6432. The Techmark 100 closed up 17 points, or 0.5%, at 3194. Europe's other major stock markets were mixed, with the CAC-40 in Paris ending up 76 points at 6302, and the Xetra Dax in Frankfurt lately down 15 points to 6951 late in the extended trading session.

Telecom stocks set the positive tone in London after Cable & Wireless (CWP) reported that although first-half profits fell 60%, net cash balances could grow to as much as 6 billion ($8.6 billion) by the end of the year. Shares in the company, which has been hard at work transforming itself from a diverse telecom investment trust into a business services group, ended the session 37p higher, or 4.4%, at 887 ($12.54).

Vodafone (VOD) consolidated Tuesday's impressive gains, ending the session a penny higher at 263.5. Brokerage Bear Stearns reiterated its "buy" stance on the stock, while Schroder Salomon Smith Barney noted that the balance sheet looked very strong, especially compared with those of its peer group.

Harried Vodafone competitor British Telecom (BTY) slipped into the red, down 21p, or 3.0%, to 677 after announcing that it has bought the remaining 49.1% of Italian network company INet for 121 million through a call option.

Elsewhere, alternative carrier Colt Telecom (COLT) closed 56p higher, or 3.2%, at 17.95.

Oils stocks surged on the back of the latest rise in crude prices. News that Offshore Kazakhstan International Operating Company will nominate a leader for its latest exploration project, one of the largest oil deposits found in decades, also benefited the two integrated majors. BP (BP) rose 12p, or 2.0%, to 603 while Shell (SC) rose 13.5p, or 2.4%, to 583.5.

Knowledge-management software maker Autonomy (AUTN) stumbled into the close after roaring all day on the back of reporting that third-quarter pretax profit was $9.2 million, outstripping analysts' forecasts of $3 million to $4 million. The shares retreated from its session high of 34.33 to close down 1.1% at 33.25.

Chip designer ARC International also finished lower, down 7p, or 2.5%, to 275.5, after delivering its first set of results since going public. In the three months ended Sept. 30, ARC recorded a pretax loss of 5.3 million on turnover of 3.2 million, which was about in line with expectations.

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