The recent underperformance of DaimlerChrysler has been pulling back the buyers recently as stories of stern action in the US by the motor giant have seeped into the market.
Through August and September, the old economy leader fell 20 per cent as a number of brokers turned distinctly chilly on the outlook for US trading. But on Monday the group confirmed it is implementing a wide-ranging review of its Chrysler operations. And this news coincided with a bullish note from Credit Suisse First Boston.
Yesterday the stock jumped €2.05 to €53.80 in robust volume of 5.3 million shares for a two-day advance of 5.5 per cent. This compares with a 12-month target price at CSFB of €68.
Shares in the technology, media and telecoms sectors were mixed ahead of the results from Yahoo! and Motorola, due out after the New York close. Siemens and telecom equipment-maker Alcatel both rose more than 4 per cent, but Epcos was lower.
Chip-maker Infineon fell 6 per cent to €49.80 and STMicroelectronics fell 1.2 per cent to €49.63 after IBM announced it would build a chip-making plant in the US.
Telecoms markets continued to reverberate to the rumour that France Telecom was close to bidding for Equant. Shares in the Amsterdam-based network services provider jumped 10 per cent before easing to close 3.8 per cent higher. The effect on France Telecom was to send it down 5 per cent to €103.10, its second day of sharp falls.
France Telecom was also involved in the other unfolding telecoms story, the moves by Enel to buy Italy's number two telecoms group Infostrada. Enel is still hoping to keep France Telecom on board in the acquisition, although relations have been strained over the price. Enel edged up to €4.39 as investors awaited a statement.
Among financials, Deutsche Bank fell prey to the rumours that a major investment bank had been hit by unexpected junk bond losses. Deutsche, which declined to comment, fell €2.59 to €92.25. The rumours coincided with news that Deutsche had offered to acquire National Discount Brokers Group in the US in a deal worth just over $1 billion.
Energy sectors topped the European performance charts yesterday as the international price of crude oil burst back above $31 a barrel. Total Fina Elf led the way up among the oil majors, adding €7.70 at €178.60.
