08/07/2003 12:01
European stock markets opened weaker on Tuesday as markets failed to capitalise on Wall Street's robust preformance overnight while losses in the heavily-weighted telecoms sector added to the negative sentiment.
Wall Street's strong performance overnight was largely priced in by the European close so investors turned to corporate news from their own region.
Germany's Xetra Dax index was the only major benchmark to notch up slight gains, opening 0.2 per cent higher at 3,337.8. The pan-European FTSE Eurotop 300 index was 0.2 per cent lower at 869.9 while France's CAC 40 started 0.4 per cent weaker at 3,169.8. London's FTSE 100 slipped 0.2 per cent to 4,065.6.
US investors snapped up equities, particularly technology stocks, after a long weekend with the Nasdaq Composite closing at a 14-month high, up 3.5 per cent at 1,721.25. The Dow Jones Industrial Average climbed 1.6 per cent to 9,216.79. The S&P closed above the 1000-level at 1,004.42.
With no economic data scheduled for release in the US investors will look to a raft of releases in Germany, ahead of the European Central Bank's interest rate meeting later in the week, to gauge the scale of economic deterioration in the eurozone's largest economy.
Foremost on investors' minds will be unemployment figures, due at 0800 GMT, which are forecast to have risen in June by 15,000 in seasonally adjusted terms reversing May's surprise decline of 4,000. The unemployment rate is forecast to remain unchanged at 10.7 per cent. Industrial production is also expected to have fallen in May by 0.1 per cent despite rising 0.2 per cent the month before. Wholesale prices are also forecast to have fallen 0.1 per cent month-on-month.
In the corporate news, Deutsche Telekom recorded hefty losses at the start of trade following the news that state development bank Kreditanstalt fuer Wiederaufbau would launch a €4.5bn bond convertible into part of its holding in the telecoms group.
Telekom shares, the most heavily traded on the German blue-chip index, slid 4.3 per cent. Its French counterpart, France Telecom was down 2.1 per cent in early trade.
However, technology stocks were once again among the prominent risers following the Nasdaq's performance overnight. Infineon, the German chipmaker, was 1.9 per cent higher while ASML, the Dutch semiconductor equipment maker, rose 2.6 per cent.
Autos were in focus after Peugot, the French carmaker, said first-half sales rose 1.9 per cent, buoyed by a strong demand outside western Europe. The stock was 0.4 per cent lower.
Also in the sector, Fiat, the Italian conglomerate rose 0.6 per cent after Ifil, its holding company, said it would no longer invest money into the struggling group in the next four years. Moody's responded to the news by cutting Fiat's rating to Ba3 from Ba1. Ifil rose 2 per cent.
Volkswagen, the German carmaker, edged up 0.3 per cent after its luxury unit Audi said it aimed to sell more than 50,000 cars in China in 2003. Investors were also still reacting to Monday's news that Volkswagen was interested in buying German industrial group MAN's truck business.
Credit Agricole rose 1.1 per cent after the French group acquired a controling stake in a mid-sized Belgian bank from Dexia and Swiss Life.
Pechiney , the French aluminium maker, rose 0.5 per cent on Tuesday ahead of a board meeting later in the day to discuss the hostile bid from Canadian rival Alcan launched in the previous session. The Pechiney stock also benefited from comments from Alcan that it has a "margin for manoeuvre" in its bid offer, giving investors hope it would increase its €41 per share bid for the French group.
Wall Street's strong performance overnight was largely priced in by the European close so investors turned to corporate news from their own region.
Germany's Xetra Dax index was the only major benchmark to notch up slight gains, opening 0.2 per cent higher at 3,337.8. The pan-European FTSE Eurotop 300 index was 0.2 per cent lower at 869.9 while France's CAC 40 started 0.4 per cent weaker at 3,169.8. London's FTSE 100 slipped 0.2 per cent to 4,065.6.
US investors snapped up equities, particularly technology stocks, after a long weekend with the Nasdaq Composite closing at a 14-month high, up 3.5 per cent at 1,721.25. The Dow Jones Industrial Average climbed 1.6 per cent to 9,216.79. The S&P closed above the 1000-level at 1,004.42.
With no economic data scheduled for release in the US investors will look to a raft of releases in Germany, ahead of the European Central Bank's interest rate meeting later in the week, to gauge the scale of economic deterioration in the eurozone's largest economy.
Foremost on investors' minds will be unemployment figures, due at 0800 GMT, which are forecast to have risen in June by 15,000 in seasonally adjusted terms reversing May's surprise decline of 4,000. The unemployment rate is forecast to remain unchanged at 10.7 per cent. Industrial production is also expected to have fallen in May by 0.1 per cent despite rising 0.2 per cent the month before. Wholesale prices are also forecast to have fallen 0.1 per cent month-on-month.
In the corporate news, Deutsche Telekom recorded hefty losses at the start of trade following the news that state development bank Kreditanstalt fuer Wiederaufbau would launch a €4.5bn bond convertible into part of its holding in the telecoms group.
Telekom shares, the most heavily traded on the German blue-chip index, slid 4.3 per cent. Its French counterpart, France Telecom was down 2.1 per cent in early trade.
However, technology stocks were once again among the prominent risers following the Nasdaq's performance overnight. Infineon, the German chipmaker, was 1.9 per cent higher while ASML, the Dutch semiconductor equipment maker, rose 2.6 per cent.
Autos were in focus after Peugot, the French carmaker, said first-half sales rose 1.9 per cent, buoyed by a strong demand outside western Europe. The stock was 0.4 per cent lower.
Also in the sector, Fiat, the Italian conglomerate rose 0.6 per cent after Ifil, its holding company, said it would no longer invest money into the struggling group in the next four years. Moody's responded to the news by cutting Fiat's rating to Ba3 from Ba1. Ifil rose 2 per cent.
Volkswagen, the German carmaker, edged up 0.3 per cent after its luxury unit Audi said it aimed to sell more than 50,000 cars in China in 2003. Investors were also still reacting to Monday's news that Volkswagen was interested in buying German industrial group MAN's truck business.
Credit Agricole rose 1.1 per cent after the French group acquired a controling stake in a mid-sized Belgian bank from Dexia and Swiss Life.
Pechiney , the French aluminium maker, rose 0.5 per cent on Tuesday ahead of a board meeting later in the day to discuss the hostile bid from Canadian rival Alcan launched in the previous session. The Pechiney stock also benefited from comments from Alcan that it has a "margin for manoeuvre" in its bid offer, giving investors hope it would increase its €41 per share bid for the French group.
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