Paris shares up sharply mid-afternoon
Share prices were up sharply across a range of blue chips in afternoon trading, rallying from opening lows as investors covered short positions made ahead of this morning's string of discouraging European corporate earnings, dealers said.
At 3.18 pm, the CAC-40 index was up 94.19 points or 3.1% at 3,129.00, on volume of 1.8 billion euro.
On the Matif, November CAC-40 futures were trading 95.5 points firmer at 3,138, while the euro stood at 1.0064/$67 against 1.0093/$97 late yesterday.
Better-than-expected US retail sales data for October, alongside encouraging jobless claims data for the most recent week, also propelled French stocks higher, although dealers cautioned that thin trading volumes are exacerbating today's upside.
"People were waiting for very poor numbers today, from Allianz, Deutsche Telekom, and pretty much all the European financials," said one trader. "And it looks like a lot of people made the same short trades, and now they're covering."
"But it still feels like we're in an uptrend; We've seen a lot of stocks taking bad news well all week, and of course weaker oil prices are helping sentiment," he added.
Vivendi Universal underperformed, down 0.15 euro at 11.75 after surprising the market with a 1 billion euro convertible bond issue, which kindled speculation that Vivendi is quickly raising funds to launch a counter bid for minority stakes in Cegetel.
Such a move keep the media conglomerate from achieving its debt reduction targets, but dealers said investors were more unsettled by the continued uncertainty over the group's strategic intentions, particularly after it named media mogul Barry Diller director of its entire US Entertainment assets.
Elsewhere, TMT issues pushed sharply higher, with Alcatel up 0.34 at 5.19, France Telecom 0.60 higher at 12.60 and STMicroelectronics advancing 1.19 to 21.49.
Thales slid 0.65 to 24.10 as investors saw declining chances of an imminent war with Iraq. EADS rose 0.08 to 11.07 after posting nine-months results that met analyst forecasts, even though it abandoned its operating margin target of 10% for 2004, which many analysts had already dismissed as too ambitious.
Among financials, Axa surged 1.13 or 9.0% to 13.73, reversing part of the 18% slide seen over the previous six sessions, and in line with broad gains for European insurers.
Societe Generale rose 2.20 to 50.60, benefiting from the market upswing even though third quarter profits fell well short of expectations, due to weaker than forecast corporate banking operations and high risk provisions, dealers said.
