Media stocks boost Europe

February 25, 2002 Posted: 1753 GMT

LONDON (CNN) -- European markets ended higher on Monday, led by media and auto stocks and supported by encouraging U.S. corporate and economic news.

London's FTSE 100 gained 1 percent to 5,100.7 and the CAC 40 blue chip index in Paris rose 1.4 percent to 4,305.44, while Frankfurt's electronically traded Xetra Dax was up 1.7 percent to 4,826.56 in late trading (the German market closes at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, rose 1.4 percent, with the IT and technology sectors also helping to move markets higher.

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The media sector got a boost from Deutsche Bank, which raised its position on the sector to "overweight" from "neutral," saying the industry should benefit from a recovery in cyclical stocks. Lehman Brothers also raised its weighting in media to 10 percent from four percent after the sector's recent underperformance.

UK media group Granada (GAA) gained 6.1 percent after investment bank Goldman Sachs also raised its recommendation on the stock to "market outperformer" from "market performer." British advertising giant WPP Group (WPP) rose 5.9 percent after WestLB Panmure upped its stock price target to 700 pence from 650p, saying that WPP's earnings forecasts for 2001 are "solid."

Britain's Pearson (PSON), publisher of the Financial Times, rose 4.7 percent after it put the last of its domestic specialist magazines up for sale after receiving offers for titles said to be worth over £60 million. Pay-TV company British Sky Broadcasting (BSY) rose 5.6 percent in London.

French media giant Vivendi Universal (EAUG) rose 3.7 percent, while TV group TF1 (TFFP) gained 2.9 percent in Paris was the top gainer in Paris at midday.

Telecoms also turned in a mostly positive performance in Europe on Monday. UK telecoms group COLT Telecom (CTM) was up 15.5 percent, while British giant Cable & Wireless (CW) added 4.8 percent and BT Group (BT) rose 3.5 percent.

Marconi (MONI) jumped 14.9 percent after it confirmed weekend newspaper reports that the cash-strapped British telecoms equipment maker was in talks to sell its Italian defence subsidiary.

Energis (EGS) climbed 29.7 percent after the British-based telecoms group said it had received expressions of interest from potential buyers for some of its operations. That followed a massive sell-off last week triggered by Energis saying a slump in earnings had left it in trouble with its creditors and facing a major restructuring.

In the auto sector, stocks gained on a positive earnest outlook from General Motors, pointing to a better-than-expected environment for the industry. German-American auto giant DaimlerChrysler (DCXG) was the top gainer in Frankfurt in late trading, rising 5.2 percent. German car maker Volkswagen (VOWG) was up 3.3 percent BMW (BNWG) added 2.3 percent and French car maker Renault [PAR: RENA] rose 1.6 percent.

In the financial sector, Zurich Financial fell 0.9 percent after Europe's third largest insurer tried to restore investor confidence after a string of profit warnings, by announcing that Rolf Hueppi will give up his post as chief executive by the middle of the year but remain chairman. A new CEO would be announced later, the group said.

Among Europe's smaller markets, Amsterdam's AEX index rose 1.4 percent and Milan's MIB30 index was up 1.3 percent, while the SMI in Zurich edged up 0.8 percent.

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In the U.S. on Monday, Wall Street powered ahead after two Dow components, General Motors and Eastman Kodak, delivered promising profit forecasts, helping the blue chip index continue to outperform the technology-laced Nasdaq composite index.

The major indexes rose to their highest levels of the session after a real estate group said new home sales showed surprising power last month, rising to a record level.

In midday trading, the Nasdaq composite index was up 24.16 points, or 1.4 percent, to 1,748.7, while the Dow Jones industrial average rose 106.5 points, or 1.1 percent, to 10,074.65.