Europe holds on to gains

March 22, 2002 Posted: 12:04 PM EST

Traders at the Frankfurt Stock Exchange

LONDON, England (CNN) - European markets ended mostly higher on Friday after strong gains in the tech, telecom and retail sectors managed to overshadow poor profit results from insurer Munich Re.

London's FTSE 100, the only major bourse to end in negative territory, closed down 0.1 percent to 5,250.5, while the CAC 40 blue chip index in Paris gained 0.5 percent to 4,601.57 and Frankfurt's Xetra Dax was up 0.3 percent to 5,365.1 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 0.5 percent, with the information technology, telecoms and retail sectors among the best performers, while insurance stocks led declines.

Tech stocks were boosted by comments from Allied Materials, the world's largest maker of chip-manufacturing equipment, which said it expected a turnaround in the semiconductor industry.

French telecoms equipment maker Alcatel (PCGE) rose 3.5 percent, while ASML, Europe's biggest chip equipment maker, rose 1.2 percent.

The telecom sector was supported by a promising profit outlook from Mmo2 (OOM), Europe's fifth-largest mobile phone company. The British company jumped 4.4 percent after it said it expected to top market forecasts for full-year earnings before interest, tax, depreciation and amortisation of £410 million ($585 million).

France Telecom (PFTE) gained 1.8 percent, one day after Europe's second largest phone company posted its first loss since floating in 1997. The results were in line with expectations and the group forecast double-digit sales growth in 2002. Deutsche Telekom (FDTE), Germany's dominant phone operator, was up 2.7 percent in late Frankfurt trading.

But loss-making UK telecoms equipment maker Marconi (MONI) dived 47 percent after it said its markets had worsened and could not agree to terms for financing with its investors.

In the retail sector, Swedish fashion retailer Hennes & Mauritz jumped more than 12 percent after it beat expectations by more than doubling its first quarter pre-tax profits and said lower price reductions helped increase gross margins.

Spanish fashion retailer Inditex posted a 31 percent rise in net income after expanding overseas. Its shares fell 1.5 percent after notching up early gains.

Leading the insurance sector lower was Germany's Munich Re, which was down 4.4 percent in late trading in Frankfurt. On Friday it posted a sharp drop in 2001 net profit to 250 million euros ($220.1 million) as it digested losses from the September 11 attacks and said results were boosted by 830 million euros in one-off factors.

Also dragged down were Germany's Allianz (FALV), which was 2.9 percent lower in late trading. British insurer CGNU (CGNU) fell 2.6 percent while rival Prudential (PRU) lost 1.8 percent.

Meanwhile, RWE (FRWE), the German utility giant, fell 2.1 percent after agreeing to buy Innogy, Britain's largest electricity supplier, for £5.2 billion ($7.4 billion). Innogy (IOG) rose 0.9 percent in London.

In Amsterdam the AEX index climbed 0.4 percent, while the SMI in Zurich was up 0.2 percent and Milan's MIB30 rose 0.3 percent.

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