Europe's telecom firms make slight comeback

While Europe's battered telecommunications made a bit of a comeback yesterday, other TMT components continued to struggle.

Deutsche Telekom rose 6.7 per cent to €26.77 and France Telecom rose 4.2 per cent to €68.50. But Nokia and Philips were lower, as were most media companies.

Europe's leading cable company UPC fell more than 18 per cent to a record low of €5.20, the third consecutive fall following Monday's results which showed losses widening to €363 million.

Among the bright spots, business software company SAP rose 7 per cent to €117.75 as it announced it was co-operating with Yahoo in creating a US-based subsidiary to develop business portals.

The motor sector, under pressure earlier in the week on concerns over the outlook for sales this year, had another busy day. BMW put on 0.5 per cent to €33.75 on news of robust sales in the US during March, compared with some volume producer rivals. BMW's sales in the US last month rose 4.7 per cent.

DaimlerChrysler slipped 1.9 per cent to €49.33, despite news that Mercedes Benz sales rose 3.1 per cent.

Among financials, Deutsche Bank edged up 0.1 per cent to €80.80, after a low of €75.71, on worries about the outlook for profits at US investment banks. Pressure on the stock had mounted after sharp falls in US peers on Tuesday, and reports that Morgan Stanley and Merrill Lynch were considering laying off staff.

Commerzbank eased 0.3 per cent to €30.22 but HypoVereinsbank put on 3.9 per cent to €59.94 on speculation that reinsurer Munich Re may raise its stake further.

French insurer Axa slipped 1.3 per cent to €118.60 as it refused to comment on a rumour that it was interested in buying Zurich Financial. The story came hard on the heels of news that American Insurance Group had bid $23 billion for life insurer American General. Zurich Financial, a much cheaper prospect, was 0.4 per cent ahead at SFr530.