European stocks drift lower

February 18, 2002 Posted: 1803 GMT

LONDON (CNN) -- European markets ended lower on Monday, with U.S. markets closed for a holiday, leaving little direction for investors on this side of the Atlantic.

While tech and telecoms stocks drifted down, there were some bright spots in an otherwise lackluster trading day.

London's FTSE 100 fell 0.5 percent to 5,154.3 and the CAC 40 blue chip index in Paris dropped 0.7 percent to 4,347.05 while Frankfurt's electronically traded Xetra Dax was down 0.2 percent at 4,854.61 in late trading (the German market closes at 1900 GMT).

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The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, slipped 0.7 percent, with the steel, telecoms and technology sectors the hardest hit.

Innogy (IOG), Britain's biggest electricity supplier, was the top gainer in London, jumping 19.7 percent after saying it had received a number of takeover approaches. The company, valued at about £2.3 billion ($3.3 billion), declined to name the possible bidders.

Rival International Power (IPR) rose 2.9 percent, while Scottish Power (SPW) edge up 0.4 percent. RWE (FRWE), Germany's second-biggest utility company, was down 0.5 percent in late trading percent after reports that it was pursuing a friendly offer worth up to £2.9 billion.

Despite the overall decline in steel stocks, the sector's focus was on the positive debut of French giant Arcelor (CELR), which ended 8.9 percent higher in Paris. The world's biggest steel maker was created by the merger of European companies Usinor, Arbed and Aceralia. Arcelor also began trading in Madrid, Brussels and Luxembourg.

Early gains by telecoms stocks were erased as investors took profits, with no new direction coming form the U.S., where financial markets are closed for the President's Day holiday.

French mobile phone operator Orange (ORA) fell 5.3 percent as a disagreement between its parent France Telecom and German partner MobilCom over third-generation mobile phone investments unnerved some investors. France Telecom (PFTE), the country's dominant phone company, fell 1.7 percent, while MobilCom (MOBG) dropped 4.3 percent.

Sweden's Ericsson, the biggest supplier of wireless infrastructure, fell 1.7 percent and Finland's Nokia, the world's biggest maker of mobile phones, lost 1.4 percent.

Deutsche Telekom (FDTE), Europe's biggest telecoms operator by sales, managed to hold onto some of its earlier gains. It was up 0.6 percent in late trading in Frankfurt after Goldman Sachs said its stock could rise at least 20 percent even tough the sale of its cable assets looked less likely.

Meanwhile, the German cartel office said it objected to Liberty Media's $5-billion plan to buy the company's cable assets. Liberty of the U.S. said late on Friday it had offered no concessions in response to objections from the German regulators.

Dutch semiconductor equipment maker ASML Holding fell 2.1 percent after the group said it had no comment on rumours it had lost an order from Intel Corp. to Japanese competitor Nikon. SAP (FSAP), Europe's biggest software company, was down 1.7 percent in late trading in Frankfurt.

British chemicals group ICI (ICI) was the biggest decline in London, falling 5.1 percent over concerns for a $649 million deficit in its pension fund and an upcoming new issues of shares.

AstraZeneca (AZN), Europe's second-biggest drugs company, fell 1.7 percent after investment bank Credit Suisse First Boston cut its rating on the stock to "hold" from "buy," saying the stock was sensitive to news from the ongoing litigation in the United States. AstraZeneca is in a legal battle over patents on its top selling ulcer drug Losec, sold as Prilosec in the United States.

Among Europe's smaller markets, Amsterdam's AEX index dipped 0.9 and the SMI in Zurich declined 0.6 percent, while Milan's MIB30 index slipped 0.5 percent.

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In the U.S. on Friday, a new round of corporate accounting blowups helped send the Nasdaq composite index to its second-lowest close of the year as investors dumped technology stocks on accounting and debt concerns.

The Nasdaq composite index dipped 2.1 percent to 1,805.2, while the Dow Jones industrial average lost 98.95 points to 9,903.04.