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Techs push bourses higher

23/11/2004 12:20
European stocks moved higher, boosted by a strong performance from the technology sector and easing oil prices, but investors were still wary of any continued euro strength against the dollar.

The FTSE Eurofirst 300 moved 0.6 per cent higher by mid-morning to 1029.57. London’s FTSE 100 rose 0.6 per cent to 4759.2, France’s CAC-40 moved 0.7 per cent higher to 3798.92 and Germany’s Xetra Dax added 0.6 per cent to 4147.42.

US equities gained ground overnight, with the Dow Jones Industrial Average up 0.3 per cent to 10,489.42 and the tech-heavy Nasdaq Composite Index rising 0.7 per cent to 2,085.19. Technology stocks were helped by a note from broker Piper Jaffray, which nearly doubled its price target for computer-maker Apple.

Investors in Europe have been monitoring the strength of the euro against the dollar, as it hovers under its all-time high of 1.3074. The lack of any firm commitment from central banks to take action to support the sliding dollar following last weekend’s G20 meeting of leading industrial nations continued to weigh on European exporters. Nymex WTI oil futures moved lower overnight, slipping 31 cents to $48.31. Dealers put the move down to profit taking, but say the market should find support around the $48 level ahead of this week’s holidays in the US.

In Europe, the technology sector moved higher on the back of the overnight move on New York’s Nasdaq Composite Index. German chipmaker Infineon rose 0.2 per cent to €8.88, French-Italian chipmaker STMicroelectronics was 0.5 per cent higher at €15.78 and Ericsson, the Swedish telecoms equipment maker, moved 0.9 per cent higher to Skr 22.70. Ericsson also received a boost from reports in the Swedish press that subscription rights to its shares have almost doubled in value in the past week.

BHP Billiton, the mining giant, rose 2.4 per cent to 600p after the company announced that it had completed a bigger-than-expected A$2.27bn share buyback of 4.8 per cent of its Australian-listed shares. Analysts said that the scale of the world’s biggest mining group’s actions reflected confidence that the company believed its own shares would trade higher.

The steel sector, solely comprised of Arcelor, the world’s biggest steelmaker, was buoyed by news that the company was restructuring its Spanish operation and had plans to cut jobs. Shares rose 1.6 per cent to €16.05.

Almanij, the Belgian holding company, continued making ground after Monday’s news that it might be bought out by its main shareholder, KBC, the Belgian bank. Fortis raised its rating on the company from ‘reduce’ to ‘hold’ and shares traded 2.9 per cent higher to €68.60.

H. Lunbeck, the Danish pharmaceutical company, was among the biggest losers, falling 1 per cent to Dkr 102.00 after its US partner, Forest Laboratories Inc. saw its shares fall 9 per cent overnight. Forest Laboratories licences Lexapro, an antidepressant, from Lunbeck and is facing a patent challenge on the drug from generic drug makers.

EADS, the European aerospace giant, rose 1.4 per cent to €23.98 as the company announced plans to compete with Boeing’s 7E7 by launching the Airbus A350. Newspaper reports suggested that the company could start delivery in 2009, beating Boeing whose long-haul 7E7-9 will not come onto the market until 2012.