With the cycle of profit warnings over, European markets managed to make a little headway, helped by support from telecommunications stocks. Share prices cheered the sudden end of the Italian auction of mobile phone licences, triggered when the British Telecom-backed Blu pulled out. The remaining five bidders had expected to pay twice as much for the privilege of providing third generation mobile services in Italy, the last of the major auctions in Europe. The telecom sector of the FTSE Eurotop 300 was 2.2 per cent higher.
The stock that did best was Finland's mobile phone operator Sonera, which gained 13 per cent to €24.80. Sonera released third-quarter results yesterday, but they contained no surprises and Mr Andrew Beale at Deutsche Bank saw most of the rise as coming from the Italian effect. France Telecom, which was involved via its stake in Wind, rose 5 per cent to €113. Vodafone, bidding through Omintel, closed 1.8 per cent up at 277p. The Internet service provider, Tiscali, which is part of the consortium backed by Hutchison Whampoa, was suspended after its shares reached the 10 per cent limit, closing €10.95 per cent higher.
Other gains were more modest. Telefonica, lead company in the Ipse consortium that contained Sonera, was just 0.2 per cent up at €21.50, and Telecom Italia Mobile was slightly down at €9.96. France Telecom's hefty gain helped the CAC 40 index in Paris return to the black, closing 0.5 per cent higher. Similarly, the Xetra DAX in Frankfurt moved into positive territory after being negative for most of the day. Deutsche Telekom, the second best gainer, rose 4.7 per cent to €40.10.
In Zurich, the telecom heavyweight Swisscom rose 2.8 per cent to 409 Swiss francs after a report in Germany's Der Spiegel that Deutsche Telekom and Vodafone were vying for a stake in its mobile operations. Technology stocks held up well considering Lucent's downgrade of its sales and profit outlook for the first quarter of 2001, the fourth time this year it has cut its forecasts. Alcatel fell just 0.6 per cent to €76 while Siemens was up 0.7 per cent to €144.30. The Swedish telecoms equipment maker Ericsson fell 5.5 per cent to €120, a 10-month low. But this was largely the continuing effect of last week's profit warning. Finnish rival Nokia was up 1.7 per cent at €45.75.
