European Midday Update: Markets Make Bright Start - TheStreet

LONDON -- The London market got off to a bright start for the week, with the banking and oil sectors driving stocks higher.

By midmorning, the

FTSE 100

was up 10.7 points at 6,374.20. Good resistance is seen close by, around the 6,400 level. If this is breached decisively, strategists expect a run-up to 6,470 in the short term. If it holds, then a drop back to 6,310 looks to be in the cards. The

Techmark

has yet to really get out of bed, up just 4.5 points at 3,475.81.

Traders say a reappraisal of the U.S. July jobs report suggests that the

Federal Reserve will now hold on rates when it meets on Aug. 22. As a result,

Barclays

(BCS) - Get Report

rose 27p to

15.80 ($23.70) and

HSBC

(HBC)

got a minor boost as

Morgan Stanley Dean Witter

lifted its price target for the stock from 875p to

10. The shares reached to an all-time high of 928p before easing to stand up 4p at 919.5.

Heavyweight oil stocks were also on a firm footing as the price of crude continues to rise.

BP

(BPA)

was up 11.5p to 608.5 ahead of Tuesday's earnings results, while

Shell

(SC) - Get Report

added 5p to 554.

Beleaguered cable company

Telewest

(TWSTY)

, whose shares have been crumpling since warning that a shortage of set-top boxes will delay roll out of its digital services for three months, surged on a report that it was to be taken over by private U.S. equity outfit

Callahan Associates

. But both the eponymous Dick Callahan and Telewest deny the buzz. Other reports talked of Telewest being in discussions with cable firms

NTL

(NTLI)

and

UPC

. Telewest rose to a session high of 181p, before easing back to stand up 12p at 172.

The telecom sector doesn't seem to know whether it is coming or going.

Vodafone

(VOD) - Get Report

shares took a nosedive this morning amid reports that the company will announce a trade sale worth

6 billion of

Infostrada

, the Italian fixed-line telephone operator it inherited after it took over

Mannesman

, for

6 billion. The shares were down 9.75p at 275.75.

Head of research at

NatWest Stockbrokers

, Jeremy Batstone, says that there is no obvious reason for the Vodafone move, but warns: "I would be skeptical about reading too much into early Monday morning moves."

Colt Telecom

(COLTY)

was up 70p to

21.10. It seems the market is anticipating a healthy set of figures when quarterly results are announced Tuesday.

British Telecom

(BTY)

was treading water, up 11p at 864.

Telecom stocks are likely to remain in the spotlight over the next 24 hours. Players are starting to talk about possible changes to the way the

Deutsche Boerse

calculates its indices. The exchange convenes Tuesday for a regular quarterly meeting, and there is widespread talk that it will move to a free-float basis. If it does,

Deutsche Telekom

(DT) - Get Report

may come under pressure as index trackers reduce their holding in the stock. The obvious conclusion is that this will tar the rest of the sector with the same brush, although punters are almost certain to have pre-empted the move.

Moving into the second week of the German auction for third-generation mobile licenses, Deutsche Telekom climbed 0.67 euros to 46.39. Newspapers were reporting Telekom could get shut out of the upcoming Italian 3G auction.

Telekom's rise was part of a general gain in tech and telco shares in Europe. The

CAC 40

in Paris was up 19.7 at 6,481.0 and the

Xetra Dax

in Frankfurt was up 67.0 at 7,083.6. The Neuer Markt's tech-heavy

Nemax 50

index was 119.2 higher at 5,777.0.

Big German techs were helped higher by softwaremaker

SAP

(SAP) - Get Report

, which confirmed press reports it was mulling listing its IT consultancy unit on the Neuer Markt in September. Midday, SAP was up 1.22 euros at 241.45 ($219.09).

Elsewhere,

Siemens

(SMWAY)

rose 2.03 euros at 159.84 and

Infineon

(EPC) - Get Report

rose 1.05 euros to 67.05.