Telecom Stocks Lift European Markets

123jump.com Staff
03 Feb, 2009
New York City

European stocks gained after earnings from Vodafone lifted telecom sector. Earnings in Germany and in France lifted mood in trading on smaller than expected loss at Heidelberg Druck. BNP Paribas dropped on the worries that merger of Fortis assets may be delayed.

[R]1:00PM New York, 6:00 Frankfurt – European stocks gained after earnings from Vodafone lifted telecom sector. Earnings in Germany and in France lifted mood in trading on smaller than expected loss at Heidelberg Druck. BNP Parisbas dropped on the worries that merger of Forits assets may be delayed.[/R]

European Stocks Tumble Led by Energy Stocks. BP plc, the energy giant based in UK reported its first quarterly loss in seven years.[/R]

European market indexes closed up after oil declined and released earnings were better than expected. Mining stocks edged higher in London trading after base metal prices edged higher.

Vodafone, the largest mobile phone company based in the UK reported 14% rise in sales as the recent acquisition in India generated better than expected revenues.

Oil dropped on concern that the global economic slump may deepen and depress demand for oil products. Recession fears also hit automakers and steel producers in the Euro zone.

Market sentiment

In London FTSE 100 Index closed higher 86.68 or 2.13% to 4,164.46.

BP plc, the largest UK oil-producer and second largest in Europe declined 3.5% after it reported its first quarterly loss in seven years.

Revenues in the fourth quarter revenues fell 23% to $61.48 billion from $79.85 billion a year earlier. Net loss in the quarter was $3.35 billion or $17.62 per diluted share compared to net profit of $4.40 billion or $22.65 per share a year earlier.

BP Plc, in the last one year traded as high as 657.25 pence in May 2008 and as low as 370.00 pence in October 2008. Based on the yesterday’s closing price of 484.75 pence the company has market cap of £90.80 billion.

Telecom Italia SpA added 7.3% and Deutsche Telekom AG added 5.4%.

In Frankfurt, DAX index higher 103.92 or 2.43% to close at 4,374.96. Of the 30 stocks in index, 27 increased and 3 declined.

Deutsche Lufthansa led gainers in the DAX index with a rise of 7.8% followed by gains in Deutsche Bank of 5.5%, in Deutsche Telekom of 5.2%, in Muenchener Rueckversicherungs AG added 4.2% and Deutsche Post Bank of 4%.

Deutsche Boerse led the decliners in the DAX index with a drop of 2.8% followed by declines in K+S AG of 0.9%. Infinieon Tech of 0.6%.

In Paris CAC 40 Index increased 52.34 or 1.79% to close at 2,982.39. France Telecom SA rose 4.2% to 18.55 euros after Vodafone reported better than expected earnings. The telecom sector in Europe rose on the news.

BNP Paribas SA dropped 2.5% to 26.70 euros after China based Ping An Insurance is expected to vote against the revised bid by BNP bid for Fortis. Ping An is the largest shareholder in the troubled Dutch bank. The news was first reported by Bloomberg.

Vinci SA, the largest construction company reported fourth quarter sales increased 2% to 8.8 billion euros and for the year increased 10% to 33.5 billion euros. The backlog of orders declined 3.7% from the third quarter to 23.2 billion euros.

Europe Markets Review

In London FTSE 100 Index closed higher 86.68 or 2.13% to 4,164.46, in Paris CAC 40 Index increased 52.34 or 1.79% to close at 2,982.39 and in Frankfurt DAX index higher 103.92 or 2.43% to close at 4,374.96. In Zurich trading SMI increased 50.65 or 0.98% to close at 5,217.61.