European markets rallied sharply yesterday, tracking a robust Wall Street and regaining strength after several days of consolidation. Oil and gas issues were stronger following a rise in oil prices while Oslo and Copenhagen, heavily dependent on oil, posted solid gains. Telecoms, however, were weaker as investors thought a projected merger between Telecom Italia and Deutsche Telekom was facing substantial regulatory obstacles.
The FTSE Eurobloc 100 index, which covers leading companies in the euro zone, closed 17.13 or 1.6 per cent higher at 1,068.10. The FTSE Eurotop 100, covering countries inside and outside economic and monetary union, climbed 46.94 to 3,024.28, while the broader FTSE Eurotop 300 settled 18.33 higher at 1,307.47.
Frankfurt finished within a whisker (2.8 points) of its session best, adding 109.38 or 2.1 per cent on the Xetra Dax index at 5,252.40.
Karstadt, a strong market lately on persistent talk of corporate activity, shot ahead on news that it was in talks with Quelle, the privately owned mail-order giant. The stock ended up 40.50 or 11 per cent at €406.50.
Deutsche Telekom maintained a fairly discreet stock market profile in the face of rumour and counter-rumour about the group's plans for a merger with Telecom Italia and possible bid for Sprint, the US carrier in which it has a 10 per cent stake. The shares eased 25 cents to €37.90.
Thyssen-Krupp recovered early falls following a downbeat trading statement. The steel leader ended 45 cents better at €21.46. Siemens jumped €3.08 to €67.38 on disposal talk.
Paris resumed its rise after a pause last week, helped by Wall Street's sharp gains in early trading.
The rise in the CAC-40, up 78.43 or 1.8 per cent to 4,379.34, came despite a sharp loss in heavily weighted France Telecom. Shares conceded €4.40 or 5.4 per cent to 76.50 on fears the company could be sidelined if Deutsche Telekom opted for a merger with Telecom Italia.
LVMH soared €21.50 or 10 per cent to €236.50, rebounding from a fall last week after it was axed from the FTSE Eurotop 100 index. Higher-than-expected first-quarter sales helped to boost the share.
BNP gave up €2 to €73.20 as investors lost patience with its slow-moving bid for Societe Generale and Paribas. Axa, a supporter of the bid, said a secret pact signed with Paribas 10 years ago to protect each other from hostile takeovers did not apply today.
Some cyclicals that rallied last week stood their ground. Saint-Gobain was up €10.50 to €163.40 while Legrand added €17.90 to €231.90.
