Hopes of more US interest rate cuts next month helped to steady European shares following a hefty batch of results from blue-chip companies such as Deutsche Telekom. But technology and telecommunication stocks struggled to stay in the black as investors worried about poor earnings and the danger of the US slowdown hitting European profits.
Deutsche Telekom reported a first-quarter net loss of €400 million, in line with expectations and down from the €1 billion in the previous quarter thanks to improving mobile business. The shares rose 1.5 per cent to €29.23.
Mobile handset makers were lower, with Nokia off 1 per cent at €33.75 and Alcatel off 4.3 per cent at €33.30. Alcatel was hit by market talk that Canada's 360 Networks, in which Alcatel invested $700 million last year, was struggling to stay solvent. 360 Networks said it would meet all debt payments. Alcatel's results are due out tomorrow.
Ericsson jumped sharply after announcing a 50-50 joint venture with Sony to incorporate their mobile phone businesses worldwide. The shares later fell back to close at SKr57, up 3.6 per cent.
Infineon rose 1.25 per cent to €44.55 after reporting better than expected second-quarter figures and repeating its forecast that the memory product market should recover later this year. The German chipmaker, still majority-owned by Siemens, said net profit fell 84 per cent to €23 million compared with the same period last year.
The troubled SAirGroup received a welcome fillip on the eve of today's shareholders' meeting, likely to be the biggest in Switzerland's corporate history.
Among the retailers, France's Pinault-Printemps-Redoute slipped 1 per cent to €191.90 despite news of a 23 per cent rise in first-quarter sales. The group said acquisitions and sustained demand for luxury goods drove sales nearly 6 per cent higher on a comparable basis over the first quarter of this year.
