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. Last Updated: 07/27/2016

Telekom Issue Fails to Ignite Slow Markets

LONDON -- Investors enthusiastically welcomed Deutsche Telekom's giant share flotation Monday, but the 20 billion Deutsche mark ($13.3 billion) issue failed to ignite European markets in general -- including Germany's, which was down overall.


Paris also sagged as market players took profits after last week's gains. The London market eked out a small rise, but Wall Street was down 13 points by the time Europe closed.


The dollar fell in European trade, dropping to around 1.50 marks after reports that German Bundesbank council member Ernst Welteke said he saw no reason for the U.S. currency to rise.


The huge flotation of Deutsche Telekom gripped investors on both sides of the Atlantic, however.


Nearly 38 million Telekom shares had changed hands by the time the German market ended floor trading. The stock began trading at a 16.5 percent premium and then surged to close just off its 34.10 mark high at 33.90.


It slipped to around 32.55 marks in later screen-based trade in Germany, but remained well above the 28.50 marks the issue was priced at on Sunday.


"There's only one subject today and that's Telekom. Don't go looking for much action elsewhere in the market," said one Frankfurt trader.


Despite the enthusiasm, Germany's 30-share DAX index ended down 31 points, or 1.14 percent, at 2,763.84. In later computerized trade, the IBIS DAX was at 2,776.27.


In London, the FTSE 100 index ended a lackluster session only 3.9 points higher, at 3,962.1.


In Paris, the blue-chip CAC-40 index closed down 11.52 points, or 0.51 percent, at 2,228.81, while the CAC-40 November futures contract fell 11 points to 2,231.


?In Asia, stock markets closed mixed Monday, though the key Hong Kong index rose to a record high. The Hang Seng Index, the Hong Kong market's key indicator of blue chips, rose 153.43 points, or 1.2 percent, closing at 13,042.80.


In Tokyo, share prices closed lower in the slowest trading of the year. The 225-issue Nikkei Stock Average lost 133.36 points, or 0.64 percent, closing at 20,796.37.


Traders said the outlook for the Japanese economy remains bleak, discouraging buying. (Reuters, AP)