European Closing Update: Wall Street, Rate Concerns Weigh on Shares
LONDON -- It was a struggle on Monday after Friday's Nightmare On Wall Street.
Bids, rumored and actual, prevented the London market from sliding even further than it might have, but negative sentiment saw the leaders finish lower nonetheless, with a bout of futures-related selling souring things further towards the close. The
FTSE 100
finished 107.1 points, or 1.7%, lower at 6,268.
Interest-rate fears remain top of the agenda, with the
Federal Open Market Committee
expected to increase short-term interest rates on Wednesday by a quarter point. The word is that the
Bank of England
will follow suit on Feb. 11.
A couple of Anglo-French tie-ups are perhaps in the works.
Blue Circle Industries
was the day's star performer in the Footsie, its shares rising 70 pence, or 20.5%, to 414 after it was confirmed that
Lafarge
of France, the building materials group, had made an approach. Needless to say this received short shrift from BCI.
Out of the woodwork and late in the session, a bid approach for
Meyer International
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emerged. The shares responded with a gain of 126p, or 33.6%, to 426, with
Saint Gobain
of France considered to be the name in the frame. The feeling in London is that the two companies would make a good fit.
The bid battle in the banking sector continued right down to the wire, with no counter-bid received by the close of play from
Bank of Scotland
to top the offer for
National Westminster Bank
(NW)
from
Royal Bank of Scotland
. However, the former has until midnight to make a play, although the market feels that we may have seen the last act in this long running Passion Play. BoS fell 40p, or 6.1%, to 620, NatWest ended the session 88p, or 6.9%, lower at 11.88 pounds and RBS fell 58p, or 5.5%, to 10.02 pounds.
In technology shares, ARM Holdings (ARM:LSE) gained 311p, or 9.2%, to 36.86 pounds following details of annual profits well in excess of market expectations.
Europe's continental bourses closed down sharply Monday, as investors decided to get out of the market prior to the monetary policy meetings of the Fed and the
European Central Bank
later this week. The
Xetra Dax
in Frankfurt tanked 231, or 3.3% to 6835.60 and the
CAC 40
in Paris closed 71.24 lower, or 1.2%, at 5659.81.
Most shares went lower from the open and stayed there, but the hyperactive European telecoms sector enabled some stocks to close higher. In Frankfurt,
Mannesmann
(MNNSY)
jumped 12.05, or 4.5%, to 280.25 euros, as it appeared
Vodafone's
(VOD) - Get Vodafone Group Plc Report
$170 billion bid looked increasingly likely to win after the U.K. company secured an agreement with France's
Vivendi
to create an Internet portal and carve up Mannesmann's fixed-telephony assets.
The deal, which robs Mannesmann of a possible white knight, also helped push and Vivendi shares 5 higher, or 5%, to 105 euros. However, Vodafone erased early gains to close down 5.25, or 1.5%, to 338.50 pence. "The noose is tightening," said one trader in Frankfurt.
Other favorites in Frankfurt had no news to allow them to buck the downward trend and ended painfully lower.
Deutsche Telekom
(DT) - Get Dynatrace Inc. Report
slumped 2.5, or 3.5%, to 69.40 euros and
SAP
finished 61.50 lower, or 7.3%, at 783.50 euros.
Investors were also graced with a newspaper report saying that
British Telecom
(BTY)
was actively pursuing either an alliance or a merger with Spain's
Telefonica
(TEF) - Get Telefonica SA Report
. BT shares ended down 83, or 6.6%, at 1182 pence and Telefonica finished 0.45 lower, or 1.7%, at 25.90 euros.
