European Midday Update: Europe Starts Week on High Note

Semiconductor makers rise ahead of second-quarter earnings announcements for Tuesday.
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LONDON -- The undertone in European markets was firm Monday morning, but news items and special situations provided the major movements in hesitant trade. Investors are watchful ahead of Federal Reserve Chairman Alan Greenspan's testimony to Congress on Wednesday.

The

FTSE 100

sported a 28.7-point gain to 6504.1 midday and the

Techmark

index took its cue from Friday's strong

Nasdaq

performance, up 51.4 points to 3,622.3.

Gainers included

Freeserve

(FREE)

, up 21p to 353 ($5.33), on reports that electronic retailer

Dixons

, which owns 80% of the Internet service provider, is back in sale talks with

T-Online

of Germany. Takeover negotiations foundered last month over price.

Vodafone AirTouch

(VOD) - Get Report

firmed 5.5p to 312 on confirmation that its offer to acquire a further 43.5% of

Airtel

, the Spanish mobile operator, has been accepted.

BSkyB

(BSY)

rose 5p to

12.95 on news that it is lifting its stake in

Open

, the interactive TV service company, from 32.5% to 80% for

394 million.

Europe's other stock markets also started out the week in positive territory, with the

Xetra Dax

in Frankfurt up 74.7 to 7393.08 and the

CAC 40

in Paris 33.87 lower to 6604.23. The

Neuer Markt's

tech-heavy

Nemax 50

index was up 186.55 to 6318.42.

Semiconductor makers

STMicroelectronics

(STM) - Get Report

and

Philips Electronics

(PHG) - Get Report

led European shares higher ahead of their second-quarter earnings statements on Tuesday.

Both companies are expected to show significant increases in earnings for the quarter, giving further proof to analysts who believe that the semiconductor industry is nowhere near the end of its cycle and a downturn is unlikely in the near term. According to consensus estimates at

First Call/Thomson Financial

, STM will post earnings per share in the second quarter of 31 cents vs. 14 cents a year ago, and Philips will record EPS of 44 cents vs. 21 cents.

By midmorning, STM was up 1.30 euros to 70.70 and Philips up 1.85 euros to 56.85.

In Frankfurt, big technology companies were higher, as

Siemens

rose 1.53 euros to 181.53 ($170.29),

Epcos

(EPC) - Get Report

gained 2.71 euros to 125.41 and software maker

SAP

(SAP) - Get Report

rose 7.45 euros to 230.45.

Commerzbank

fell 0.46 euro to 38.14 and

Dresdner Bank

rose 1.93 euros to 47.00, as continuing merger talks last week failed to produce results.

Deutsche Bank

was up 1.69 euros to 95.16

Most European telcos were having a good session early Monday, as

Deutsche Telekom

(DT) - Get Report

rose 1.46 euros to 60.15 and

France Telecom

(FTE)

added 2.90 euros to 157.70.

Telefonica

(TEF) - Get Report

was unchanged at 25.50 euros.