European stocks end higher

  • Business
  • Thursday, 03 Nov 2005

LONDON: German shares recovered lost ground Wednesday to close higher as U.S. markets headed up and Credit Suisse Group and Deutsche Telekom gained. 

Germany's DAX Xetra 30 ended up 0.7 percent at 4,954 points after earlier declines, while the U.K.'s FTSE 100 index added 0.3 percent at 5,358 points. France's CAC-40 index finished down 0.1 percent at 4,429 points. 

Deutsche Telekom closed up 2.6 percent after it announced job cuts of 32,000 over three years as part of a US$4 billion (euro3.3 billion) restructuring. 

Europe's largest phone company cited "massive changes in the industry'' and the shift away from fixed-line revenue for the revamp. 

O2 shares ended down 5.6 percent after Deutsche Telekom confirmed that it won't counter Telefonica's offer for the U.K. mobile operator. 

And Irish telecom Eircom Group added 17 percent after it said it has received a takeover approach, though this "may or may not'' lead to a formal bid. 

Credit Suisse added 0.7 percent after posting a larger-than-expected 42 percent increase in profit.  

Its institutional securities division swung to a profit and the bank pulled in 19 billion francs of net new assets. 

Rival UBS extended Tuesday's gains after its own stellar earnings, closing up 1.7 percent. 

Reinsurer Swiss Re lost 0.5 percent after warning that it won't meet its 10 percent earnings-per-share growth target for 2005 after seeing US$750 million (euro625 million) in claims for Hurricanes Katrina and Rita. 

U.S. stocks traded higher after a weak opening, as solid quarterly results from Time Warner Inc. tempered disappointment over a weak outlook from security software giant Symantec and a revenue shortfall at Sun Microsystems. 

Tuesday's U.S. Fed rate hike "hasn't really done a lot in the (European) markets. ... We're probably sitting on the fence a bit now ahead of the European Central Bank meeting tomorrow,'' said Jimmy Yates, a trader at CMC Markets. 

The European Central Bank is expected to keep rates on hold Thursday at 2 percent. 

Some European pressure came from chemical stocks, led by declines in Germany's BASF, which closed down 1.4 percent.  

Earnings were in line with expectations, though BASF warned that fourth-quarter earnings would be below last year's.Investors in Frankfurt welcomed U.S. sales figures from DaimlerChrysler. U.S. sales fell 3 percent in October, or up 1 percent if adjusted for one fewer selling day. 

DaimlerChrysler shares ended up 1.4 percent. 

Also in Germany, Henkel KgAA - the maker of Dial soap and a variety of other consumer goods - ended up 7.4 percent.  

It said third-quarter net profit rose 7.7 percent with sales up 13.2 percent. Henkel reiterated its 2005 forecast for operating profit and sales. 

Shares at retail behemoth Metro AG fell 3.3 percent after it said German retail food sales were significantly behind expectations due to uncertainty surrounding the nation's recent general elections. Metro also cut its full-year forecast. - AP 

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