Europe rebounds on U.S. data

February 28, 2002 Posted: 1749 GMT

LONDON (CNN) -- European markets ended mostly higher on Thursday, rebounding from earlier losses, after upbeat U.S. economic news gave a glimmer of hope that corporate earnings could soon improve.

Dutch financial group ING and German drugs company Bayer also gave the markets a lift.

ING shares jumped 5.5 percent after it posted a 5 percent rise in earnings per share for 2001, while Bayer (BAYG) was up 3.6 percent in late trading in Frankfurt following a report in a German newspaper that the group plans to streamline its management.  

London's FTSE 100 fell 1.5 percent to 5,101, while the CAC 40 blue chip index in Paris gained 0.9 percent to 4,462.99 and Frankfurt's electronically traded Xetra Dax was up 1.7 percent at 4,988.28 in late trading (the German market was closing at 1900 GMT).

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The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, fell 0.3 percent, with the telecoms, techs and media sectors among the decliners.

One of the hardest hit in the telecoms sector was French mobile phone operator Orange (PORA), which lost 4.1 percent, making it the top loser in Paris. UK mobile phone company mm02 (OOM), which was demerged from BT Group, dropped 2.7 percent.

Britain's Vodafone (VOD), the world's largest mobile phone operator,  lost 3.6 percent, after saying it had not changed its outlook for the second half of the year, which called for a 35 percent rise in its earnings margin and  a 20 percent increase in its subscriber base for the full year.

French telecoms equipment makers Alcatel (CGEP) lost 1 percent, while German chip maker Infineon (FIFX) was down 0.3 percent in late trading. Europe's largest computer services firm, Cap Gemini (PCAP), fell 1.3 percent. 

Germany's Linde (FLIN), the world's fourth biggest industrial gas producer, was the top loser in Frankfurt in late trading, falling 1.3 percent. It said its 2001 EBIT (earnings before interest and tax) came in at 687 million ($594.3 million), a 2.8 percent rise on the year but below analysts' expectations.

France's Lafarge (PMMB), the world-biggest cement maker, fell 4 percent after posting a 3.3 percent increase in annual profit to 750 million.

British insurer Royal & Sun Alliance (RSA) lost 4.9 percent in London. The group said its 2001 profit was wiped out as the company more than doubled its reserves for asbestos claims. It also faced losses of about £215 million from the terror attacks on the World Trade Center.

Royal Bank of Scotland (RBOS), Britain's second-biggest bank, fell 0.1 percent after it said annual pretax profit rose 32 percent to £5.801 billion in 2001. The profit was in line with expectations as the company benefited from the acquisitions of rival NatWest in 2000 and said it expected cost savings to reach £5.5 billion by 2003, higher than expected.

Hilton Group (HG-), the British hotel and gaming company, lost 4 percent. It said on Thursday that 2001 pretax profit before cost rose 1.3 percent to £280.2 million ($397.3 million), in line with expectations.

Among Europe's smaller markets, Amsterdam's AEX index rose 0.5 percent and Milan's MIB30 index edged up 0.2 percent, while the SMI in Zurich added 0.5 percent.

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In the U.S. on Thursday, signs of a rebounding economy sent stocks higher as the government said gross domestic product grew 1.4 percent in the fourth quarter of 2001, revised upwards from previous estimates.

The markets were also boosted by a much-watched survey of manufacturing in the Chicago area, which showed unexpectedly strong growth.

At midday, the Nasdaq composite index was down 5 points, or 0.3 percent, to 1,746.89, while the Dow Jones industrial average was up 43.31 points, or 0.4 percent, to 10,170.89.