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Europe knocked by U.S. data
LONDON, England (CNN) -- European markets ended mixed on Monday as disappointing U.S. manufacturing data cut into early gains on Wall Street and overshadowed a strong showing by European telecom stocks. London's FTSE 100 closed 0.4 percent lower at 4,151.3 and the CAC 40 blue chip index in Paris lost 0.8 percent to 3,298.76, while Frankfurt's electronically traded Xetra Dax was up 2.2 percent to 3,392.94 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 down 0.1 percent after reaching three-month highs earlier in the session. Monday's initial gains in Europe were led by tech and telecom stocks as investors saw signs of hope for a turnaround in the sector. "We're seeing sector rotation out of some of the defensives and into the cyclicals -- economically sensitive stocks such as telecoms," Nigel Cobby, managing director of European equities at JP Morgan, told Reuters. The German market was bolstered by Deutsche Telekom, Europe's biggest phone company, which was up 4.2 percent to 12.77 euros in late Frankfurt trading. On Monday, it said it would sell 120 million shares of its T-Online unit in an effort to pay down its debt pile. Although the sale price has not been agreed, Reuters said the shares could be sold for 6.10 euros each, which could raise 732 million euros for Germany's dominant phone company. T-Online (ATOI) was up 5.5 percent to 6.49 euros in late trading. (Full story) Vodafone (VOD), Europe's largest mobile phone operator, rose 1.4 percent to 123.87 pence after its Japanese unit J-Phone said it would start commercial third-generation mobile phone services this month. (Full story) UK rival mm02 (OOM) added 3.3 percent to 52.75 pence and Cable & Wireless (CW) gained 6.4 percent to 87.25 pence. Nokia, the world's biggest mobile phone maker, was up 2.8 percent to 19.95 euros after Merrill Lynch told investors to "buy" the stock because Nokia was best prepared to take advantage of the booming replacement handset market next year. It also said it now expects global handset sales to surge to 474 million in 2003, compared to a previous prediction of just 410 million. (Full story) Investors will also be closely watching Nokia's year-end strategy meeting in the United States on Monday and Tuesday for more clues on the company's outlook for handset sales. Swedish rival Ericsson, meanwhile lost 1.1 percent to 8.75 crowns after France Telecom said on Sunday it had arranged a multi billion euro loan repurchasing agreement with Ericsson and Nokia, as well as banks, that was needed for a rescue plan for its German mobile phone partner MobilCom to go ahead. (Full story) In addition, Hutchison Telecommunications (Australia) said on Monday it had inked a seven-year deal with Ericsson's Australian subsidiary to run its networks. (Full story) MobilCom (AMOB) was up 10.6 percent to 5 euros in late Frankfurt trading, while France Telecom (PFTE) ended down 1.2 percent to 17.79 euros in Paris. In the financial sector, Commerzbank (FCBK) was up 10.2 percent to 10.30 euros in late Frankfurt trading on continued speculation that obstacles to a merger with rival HVB Group (FHVB) were being removed. HVB was up 9.5 percent to 18.06 euros in late trading. Credit Lyonnais (PCL) rose 3.5 percent to 52 euros after France's biggest bank BNP (PBNP) increased its stake in the country's sixth-largest bank to 16.22 percent. BNP fell 3.35 percent to 39.65 euros. (Full story) Credit Agricole, which has said it would be interested in a merger with Credit Lyonnais, lost 0.4 percent to 16.32 euros. The AEX index in Amsterdam was down 0.2 percent and Milan's MIB30 index lost 0.3 percent, while the SMI in Zurich added 0.6 percent. In the U.S. on Monday, the Dow lost much of a strong early gain as a weak report on the manufacturing sector took the lustre off solid holiday retail sales and an upgrade of technology bellwether Intel. (Full report) At 1545 GMT, the Dow Jones industrial average was up 7.49 points to 8903.58, while the Nasdaq composite gained 16.34 points to 1495.12 and the Standard & Poor's 500 index edged up 1 point to 938.
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