European stocks end mostly lower

  • Business
  • Saturday, 12 Aug 2006

LONDON (AP) - European shares traded mostly lower Friday, pulled down by a weaker start in the U.S. equity market and further pressure from the telecom sector. 

The U.K.'s FTSE 100 index closed down 0.1 percent at 5,820, the German DAX Xetra 30 index declined 0.1 percent to 5,628 and the French CAC-40 index added 0.2 percent to 4.985. 

Gains were limited by a lower start to U.S. trading as wary investors once more sought clues as to whether the economic slowdown will be mild or harsh. 

Airlines recovered some of the ground they lost Thursday after U.K. authorities detained suspects allegedly involved in a plot to blow up planes traveling between the U.K. and the U.S. 

Deutsche Lufthansa rose 0.5 percent and Air France-KLM tacked on 0.5 percent, while British Airways finished down 0.1 percent. 

Telecom shares declined for a second day as fears intensified that operators may have to cut prices after Deutsche Telekom said that it's aiming to become the price leader in Germany and as analysts made downgrades in the sector. 

"Yesterday's profit warning at Deutsche Telekom supports our market underweight sector stance and indicates the increasing likelihood of warnings elsewhere,'' said analysts at Bear Stearns. 

Deutsche Telekom extended Thursday's sharp declines, falling another 3 percent. Vodafone Group lost 1.8 percent and BT Group declined 0.3 percent. 

Companies tied to the French economy improved, following estimate figures on gross domestic product from the Insee statistics agency showing that growth expanded by between 1.1 percent and 1.2 percent in the second quarter, beating market estimates for growth of 0.7 percent. 

Bank BNP Paribas rose 1 percent, while retailer Carrefour tacked on 0.7 percent. 

ThyssenKrupp fell 7.7 percent after the German steel and elevator maker said it plans to spend euro2.3 billion (US$2.95 billion) on new steel plants in the U.S. and sell its North American auto body and chassis operations.  

The news overshadowed strong third-quarter net income that rose 84 percent to and a higher sales and earnings target for the year. 

Schroders declined 9.5 percent in London after the U.K. fund manager said its funds under management edged lower. 

First-half profit before tax rose 7 percent on a 31 percent increase in private-banking revenue. 

Gaz de France gained 1 percent after it said that second-quarter net revenue rose 34 percent due to strong contributions from its energy sales, exploration and international transmission divisions. 

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