Sector switching created a number of sharp movements for motor stocks in the wake of broker downgrades at DaimlerChrysler and broad market enthusiasm for Volkswagen's upbeat results statement.
The third quarter report from DaimlerChrysler sent analysts into a huddle on Thursday and by yesterday morning most of them had emerged in grim mood. The group warned earlier this year that trading in the US was far from positive. And the tone of the quarterly statement suggested that downgrades could be in the pipeline.
Sure enough, the shares pushed steadily lower from the opening bell as investors reacted badly to a number of negative comments from brokers.
Deutsche Bank cut its earnings estimates not only on the depressed outlook at Chrysler in the US but also more significantly because of DaimlerChrysler's cautious statements regarding operating margins in Europe at the main Mercedes business.
At the beginning of this month, Deutsche Bank cut its earnings estimates of DaimlerChrysler for this year and next by 10 per cent. It has now cut 2001 forecasts by a further 8 per cent. It continues to see "little chance for a positive re-rating of the shares".
These tumbled to within a whisker of a fresh low for the year at €49.80 before modest buying support showed through. The stock ended down €1.06 at €50.94 in 4.5 million shares traded.
Switching within the sector sent both Volkswagen and BMW ahead with the former pushing up €1.25 at €54.55 on the back of a solid set of third quarter results which were right at the top of most brokers forecast.
BMW added 58 cents at 38.27. Renault gained €2.90 or 5.7 per cent at €53.90 ahead of Monday's results statement from Nissan Motors, the Japanese car group in which Renault has a near 40 per cent stake.
Telecoms continued to provide sector investors with an exciting ride, rebounding strongly to close on a high after a series of double-takes earlier in the week.
Equipment maker Alcatel, which puts out third quarter figures on Tuesday, jumped €3 to €73.50 to restore some pride to the share's price after a two-day decline of more than 13 per cent in the wake of disappointing figures from Canadian peer group, Nortel Networks.
Among top operators, Deutsche Telekom rose €2.51 or 6 per cent to €44.71 in a robust 12.5 million shares traded helped by press reports that its $28 billion takeover bid for Voicestream Wireless of the US had managed to clear a significant regulatory hurdle.
France Telecom put on €6.90 at €125.9 and Sonera jumped €1.10 to €28. Europe's two top mobile handset makers also came in for buying with Nokia gaining 43 cents to €46.06 and Ericsson advancing 1.50 Swedish krone to SKr128.
