European Closing Update: Markets Move Sideways
LONDON -- Market participants can be forgiven if they experienced a sense of d¿j¿ vu following Tuesday's relatively lackluster session. Other than a few standout movements, there was not too much to get overly excited about and traders once again decided that their best strategy is to remain firmly on the sidelines. The
FTSE 100
closed 9.6 points higher at 6,473.80, while the
Techmark
index of leading technology shares finished 6.48 points lower at 3,398.27 points.
Banks ostensibly had a good session, with both
HSBC
(HBC)
and
Standard Chartered
posting healthy rises on the perception their global reach will isolate them from any fallout from a pricing war in the U.K. mortgage market.
HSBC gained 38.5p to 805.5 ($12.19), while Stan Chart closed 8.5p higher at 896.5.
Barclays
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and
Royal Bank of Scotland
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managed to hitch a lift on the rally, gaining 19p to
15.01 and 14p to
10.54 respectively.
But something is clearly rotten in the banking sector.
Lloyds TSB
(LLDTY)
continued its fall from grace, shedding another 14.5p to 569.5. According to Nick Glydon, technical analyst at
Robert Fleming Securities
, the move back below major support at 600p suggests a further decline to at least 500p.
It was also a mixed story for telecoms.
British Telecom
(BTY)
rose 14p to 933 as the market took heart at the launch of
WorldConnect
, its joint venture with the US's
AT&T
. Spurious rumors are also starting to do the rounds that BT is looking for an even closer relationship with its U.S. chum, and that it may eventually decide on a full-blown merger.
But underlining the current schizophrenic nature of the sector, BT warned that its bidding for an Italian 3G mobile license was likely to leave its gearing substantially higher. The market chose to ignore this, and seemed instead to focus their negative energy on
Vodafone AirTouch
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. The FTSE 100 heavyweight closed 10.25p lower at 304 after negative broker comments about
Ericsson
and
Nokia
on handset margins.
Cable & Wireless
(CWP)
was a nice illustration of a market caught in two minds. Its stock was marked down to a session low of
12.04 on news that
Deutsche Telekom
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switched its attention elsewhere and is now looking to buy U.S. mobile phone company
VoiceStream
(VSTR)
. However, by the close, Cable & Wireless had made an impressive comeback, closing up 4p at 1252.
The momentum behind
Bookham Technology
(BKHM)
continued, with the stock consolidating further on its recent strong performance. Although it eased back from its record level of 4905p to close up 35p at
46.95,
50.00 is starting to look too tempting not to be targeted.
Dot-com stocks took a pasting on the uncertainty over the state of
letsbuyit.com's
IPO on Frankfurt's
Neuer Markt
, scheduled for tomorrow.
Freeserve
(FREE)
shed 8.25p to 307.
Scoot.com
plummeted by over 9% to close at 130p, while
QXL
(QXLC)
fell by around 6% to 67.75p.
Europe's other major stock markets closed mixed Tuesday, with the
CAC 40
in Paris ending up just 2.93, or 0.05%, at 6,490.4. Late in the German trading session, the
Xetra Dax
in Frankfurt was down 58.0, or 0.8%, at 7,012.8 and the
Neuer Markt's
tech-heavy
Nemax 50
index was off a whopping 254.6, or 4.2%, at 5,852.9.
Deutsche Telekom weighed on the Dax amid the reports it was considering a $30 billion bid for VoiceStream. Two hours to the close DT was down 1.69 euros, or 2.8%, at 59.66 ($56.99).
France Telecom
(FTE)
, which is also thought to have an interest in VoiceStream, closed down 3.40 euros, or 2.3%, at 147.60.
Elsewhere in the telco world,
Telefonica
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ended up 0.33 euros, or 1.4%, at 24.78 and
Alcatel
(ALA)
was up 2.50 euros, or 3.4%, at 76.90.
French insurer
Axa
(AXA)
closed down 8.50 euros, or 5.3%, at 152.00, after
Morgan Stanley Dean Witter
lowered its rating to "neutral" and German electronics giant
Siemens
(SMWAY)
was up 0.99 euros, or 0.6%, at 166.99, as
Lehman Brothers
reiterated its "outperform" rating.
