Telcos Push Up World Stocks
- By Leonard Santorelli
- Nov. 23 1999 00:00
LONDON -- European stocks made a strong start Monday, lifted by the Vodafone-Mannesmann takeover battle and Tokyo's overnight close at its highest level in more than two years.
Oil prices soared to new post-Gulf War highs, after Iraq rejected a two-week extension of its "oil-for-food" deal.
In currencies, the euro was stuck close to last week's four-month lows against the dollar though it was helped a little by a German central bank report, which said Germany was now on clear growth track. European government bond prices moved slightly lower in early trade with the market focused on the euro.
European bourses made gains in early trade shortly after the Nikkei 225 average rose 1.35 percent to end at 18,822.12 on the back of surging technology shares. Japanese high-tech stocks were lifted by the technology-laden Nasdaq market's 13th record close in 16 sessions in the United States on Friday.
In Europe interest focused on telecoms shares as markets awaited the next move in Vodafone Airtouch PLC's $128.5 billion bid for Mannesmann AG. Vodafone was up nearly 4 percent in early trade and Mannesmann gained 2 percent.
Other issues in focus in European trade were the collapse Monday of talks to save the financially troubled German construction group Philipp Holzmann, bringing about Germany's largest corporate collapse in five years.
At mid-morning the pan-European Eurotop index of 300 shares was up 2.78 points or 0.20 percent at 1424.05 while the narrower Euro Stoxx index of 50 blue-chip euro zone shares was up 13.62 points or 0.32 percent at 4306.02.
Paris was the strongest performer, hitting an intraday high of 5,304.12 points on the CAC-40, powered by telecoms stocks.
London's FTSE 100 index rose 0.7 percent. Vodafone's advance and an outbreak of takeover speculation elsewhere helped offset the lack of a clear lead from Wall Street's Friday performance.
Vodafone, which delivered about 17 points of the FTSE 100's advance, has seen its shares putting on a volatile showing in recent sessions amid speculation over the outcome of the battle for Mannesmann - the biggest hostile bid in history.
Elsewhere telecoms group Cable & Wireless gained 4.6 percent amid talk of an approach from Deutsche Telekom, while in total the telecom sector delivered about 22 points of the index advance.
On Friday the Dow Jones industrial average closed down 0.29 percent, at 11,003.89, a day after it closed above 11,000 for the first time in over two months.
The Nasdaq composite index closed up 0.66 percent at a new high of 3369.25.
The euro was stuck within striking distance of last week's four-month lows against the dollar.
Wariness of possible central bank intervention kept the euro hoisted about half a cent above Friday's $1.0242 four-month low, but traders said the United States, where stock prices have stabilized this month and economic growth remained robust, was seen a safe-haven against any seasonal disruptions.
With a virtual half-week for U.S. financial markets due to the upcoming Thanksgiving Day holiday and a Tokyo market holiday Tuesday, volumes were thin.
January Brent crude futures on Simex hit a new post-Gulf War high trading at $25.70 per barrel, up 63 cents from its settlement in London on Friday.
Prices were boosted after Iraq on Saturday rejected a United Nation's decision to extend its oil-for-food program by two weeks.
Iraq exports some 2.4 million barrels per day, so a disruption to its sales could have a major impact on the oil market.