European Midday Update: Blu Walks Away From Auction, Boosts Footsie - TheStreet

LONDON -- The decision by British Telecom( BTY) and its partners in the mobile-phone consortium Blu to pull out of Italy's auction for third-generation mobile-phone licenses helped lift London's stocks.

By midsession, the

FTSE 100

was up 32.8 points to 6309.1 as BT rallied to 739p ($10.72), before falling once it was confirmed that Blu has indeed pulled out. Midsession, BT was up 19p at 734.

"People are saying that overall it's not a bad thing," says a senior salesman at a major U.K. investment house in London. He says the feeling is that BT has been saved from paying too much for something that will yield too little. Italian press reports have hinted that Blu will now look to do a deal with one of the five remaining bidders in the auction, so perhaps the group will gain a foothold in what is arguably Europe's most mature mobile-phone market through the back door.

The shares of other operators involved in the Italian auction also rose, because Blu's decision to quit means the auction is over. The auction raised only 12.2 billion euros ($10.2 billion), well short of the 21 billion euros the Italian government had been hoping for.

Vodafone

(VOD) - Get Report

was up 8p to 284. On the continent,

France Telecom

(FTE)

gained 3.00 euros to 110.00,

Telefonica

(TEF) - Get Report

rose 0.48 euro to 21.88 and

Telecom Italia

(TI)

climbed 0.15 euro to 12.60.

By midday, the continent's markets were mixed. The

CAC-40

in Paris was up 17.27 points to 6166.71, but the

Xetra Dax

in Frankfurt was down 19.11 points to 6309.1.

In London's tech sector, news that chip designer

Parthus Technologies

(PRTH) - Get Report

is considering a secondary share offering of around $200 million weighed on the

Techmark 100

. The index fell 15 points to 3436 as Parthus shed 9% to 273p.

Oil stocks were fueled by the dire situation in the Middle East.

BP

( BPA) rose 4.5p to 623, while

Shell

(SC) - Get Report

gained 0.5p to 588.5.