LONDON -- There has been plenty to occupy the thoughts of investors Friday morning, with news that the U.K.'s
Bank of Scotland
have held preliminary merger talks, and confirmation that the European Central Bank
intervened to buy euros in the foreign exchange market.
By midday, the
was up 25.6 points to 6417.60 as the news about Abbey National and BoS prompted a flurry of activity elsewhere in the banking sector.
Abbey National soared to a high of
10.80 before retreating slightly to stand up 8.3% at
10.49 ($15.21). The Bank of Scotland hardly broke a sweat as it posted a 20p gain to 696. BoS played down the possibility of a merger. "Abbey National contacted Bank of Scotland last week. It seems unlikely that Abbey National's approach will lead to a satisfactory transaction for Bank of Scotland's shareholders, but of course the Board of Bank of Scotland always reviews opportunities to optimize shareholder value," the bank said in a stock exchange announcement.
got marked lower as some speculative money flowed to Abbey and the Bank of Scotland.
Traders say that if Barclays and
do get involved, they will find themselves caught up in an expensive bidding war for Abbey National. But will either really make a play for Abbey? If Barclays does, it will almost certainly have problems with the
following its takeover of
. As for Lloyds, it has hinted that because of possible problems with the Commission, any future deals will not be centered on the U.K. Barclays was down 32p to
19.67, while Lloyds shed 23p to 695.
was active again after Thursday's heavy fall following the downgrading of profit forecasts by its house broker
. The shares firmed 5.75p to 258.75, as the market is speculating that index provider
is going to announce a move to freefloat weightings on Monday. If it does, Vodafone would be a major beneficiary because the weighting of companies such as
will be reduced. This is because large blocks of their shares are still owned by the government, while Vodafone has a 100% freefloat. In other words, all of its shares are in circulation.
reported a hefty loss for the quarter to Sept. 30 of
123.6 million. But the market welcomed news on its subscriber levels. "Reaching our 5 million target ahead of schedule is a fantastic achievement. We are confident that we are on course to achieve our target of 7 million subscribers by the end of 2003," says Tony Ball, the company's chief executive. Investors agree and pushed the stock 5.6% higher to
Tech stocks got off to a subdued start, but as lunchtime approached they were basking in some afterglow from the Nasdaq's performance overnight. The
added 56 points to 3499.
A report from the
Semiconductor Industry Association
saying that chips sales are expected to rise 37% this year boosted the shares of
, which was up 40p to 745.
On the Continent, the
in Paris was up 22.18 points to 6422.49 and the
in Frankfurt was up 46.15 points to 7134.79 as it emerged that the ECB intervened on its own in the foreign exchange market this morning to boost the euro. By midday, the euro was trading slightly higher around $0.87. The euro hit an all-time low last month of $0.82.
The ECB said later that bit had not asked any of its
Group of Seven
partners to help in the intervention.