LONDON (The Deal) -- Two big stories sent shockwaves through the European markets Friday. The first, initially seen as a positive, was a rumor that U.S. telecoms giant AT&T (T) is considering a takeover of its British rival Vodafone (VOD). Vodafone's been seen as a target ever since it agreed to sell its stake in Verizon Wireless, but the news sent the share skywards on the London market, taking it up 2.13% to over 229 pence.
But the second story was the announcement, also heavily trailed, that the U.K. Treasury has decided not to break up Royal Bank of Scotland (RBS)into a good and bad bank. Instead, the mainly taxpayer-owned institution will handle its remaining $60 billion of toxic loans in an internal bad bank -- and speed up the sale, even if it means losing more money on some of the disposals. The bank will also speed up the sale of its U.S. bank, Citizens, aiming for an IPO next year and a complete disposal by 2016.
But after a bit of a wobble, the FTSE 100 was up again just over 0.02%, just about flatlining overall at 6733.
The Dutch government also announced plans this morning to unwind some of the bad bank provisions it put in place to help ING (ING) bank at the time of the market crash. Though no timing's been put in place yet, the expectation is that the deal will lead to a profit for the Dutch taxpayer.
In Frankfurt, the Dax was down about 0.2% at 9017. And in Paris the CAC 40 was down about 0.35% at 4285. Both were led downward by banks and auto makers, particularly after a profit warning from Nissan in Japan.
In India, the stock market hit a record high -- although later in the day, there were new figures out showing the country's manufacturing sector continued to contract in October.
In Japan, the Nikkei 225 closed down less than 0.1% at 14,201.57, partly on that profit warning. But there was better news from Toyota (TM) which saw its China sales soaring in October. In Hong Kong, the Hang Seng was up slightly at 23,249. In Shanghai, the FTSE China B 35 was up 0.68% at 9,028.8.