European Closing Update: Nasdaq Weakness Hurts Europe's Tech Stocks
LONDON -- The Nasdaq's fall overnight and weak open Friday morning put pressure on Europe's technology stocks.
In London, the
FTSE 100
ended down 16.4 points, or 0.3%, at 6,335.70, while the
Techmark
fell a more marked 57.2 points, or 1.6%, at 3,683.75.
In the tech sector, some of the biggest losers included
Logica
down 55p, or 3.0%, to
17.60 ($26.40),
ARM
(ARMHY)
down 11p, or 1.4%, to 764, and
Bookham Technology
(BKHM)
down 92p, or 1.9%, to
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47.00.
Telecoms remained under pressure following the plunge in
Nokia
on Thursday and ahead of the German auction for third-generation mobile phone licenses next week.
Although it's now expected that the amount of money the telecommunication companies will have to pay for German licenses will be vastly less than initial forecasts -- one of Germany's leading economic research institutes
DIW
is predicting that the four to six licenses on offer will generate less than 10.2 billion euros compared with the more than 60 billion euros originally predicted -- there is still a lot of uncertainty surrounding the outcome.
Vodafone
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fell 11.25p, or 3.9%, to 280.25, which was enough to knock around 34 points off the Footsie.
Energis
(ENGSY)
was slammed, falling by 49.5p, or 8.5%, to 535p, and
Colt Telecom
(COLTY)
plunged 151p, or 6.6%, to
21.90.
Europe's telcos also suffered.
Deutsche Telekom
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was down 2.32 euros, or 4.7%, at 47.09 ($43.32),
France Telecom
(FTE)
was down 7.00 euros, or 5.0%, at 134.00 and
KPN
(KPN)
was down 0.80 euro, or 2.0%, at 39.50.
Nokia, though, managed to recoup some of its losses to end up 1.63 euros, or 3.6%, at 46.41.
British Telecom
(BTY)
was an also oasis of calm following its better-than-expected, though still pretty woeful, first-half results Thursday. For the moment, the market seems convinced that the company will return some value to shareholders by spinning off its network business and other disposals. Only time will tell if this trust is not misplaced. The shares close unchanged at 865p.
In the media sector,
Granada Media
announced that it has agreed to buy
United News and Media's
(UNEWY)
TV interest for 1.75 billion pounds in cash and stock, thus dashing the hopes of some that it would either buy United outright or make a bid for the U.K.'s other major TV media firm,
Carlton Communications
(CCTVY)
. Carlton fell 24p, or 2.9%, to 789, and United plunged 115p, or 12.2%, to 830p. Granada, however, rose 30p, or 5.1% to 615p.
Finally some respite for embattled cable operator
Telewest
(TWSTY)
, which saw its shares hit a low of 179p on Thursday after announcing that a shortage of digital set-top boxes is preventing it from signing on new subscribers. The shares ended the day up 6p, or 3.6%, at 185.
Among the banks,
Lloyds TSB
first-half earnings were slightly ahead of forecast, with pretax profits for the period up 12% to
2.06 billion from last year's figure of
1.85 billion. Lloyds' shares rose 14p, or 2.4%, to 600.
HSBC
(HBC)
succumbed to profit-taking as it made its debut on the
ParisBourse
. Funds managers bought the stock ahead of the listing, which boosted the bank's weighting in the FTSE. Today's pullback looks like as clear a case as "buy on rumor, sell on fact" as you can get. No doubt investors also paused for breath ahead of the release of first-half earnings on Monday. The shares closed 18p lower, or 2.0%, at 885.
Europe's other bourses ended the week lower. The
CAC 40
in Paris was down 108.6, or 1.7%, at 6,403.0. Late in the German session, the
Xetra Dax
in Frankfurt was down 69.8, or 1.0%, at 7,113.6 and the Neuer Markt's tech-heavy
Nemax 50
index was 170.1, or 3.2%, at 5,215.4.
