Monday June 29, 12:06 PM
Vodafone talk lifts European equities
LONDON (AFP) - European stock markets rallied on Monday, helped by a report that mobile phone giant Vodafone (LSE: VOD.L - news) could launch a bid for the British unit of Germany's T-Mobile, traders said.
In late morning trading, London's FTSE 100 index of leading shares climbed 0.56 percent to 4,264.60 points.
Frankfurt's DAX 30 (Xetra: news) rallied 1.23 percent to 4,835.65 points and the Paris CAC 40 advanced 1.27 percent to 3,169.63 points nearing the half-way stage.
The DJ Euro Stoxx 50 index of leading eurozone shares increased 1.11 percent to 2,416.35 points.
On the foreign exchange market, the European single currency fell to 1.4012 dollars.
"European markets rose, lifted by financials and the heavyweight Vodafone after reports of a potential bid for rival T-Mobile UK," said analyst Joshua Raymond at spread-betting firm City Index.
"Overall, the markets are very quiet today. We have seen low trading volumes which signals that investors are getting ready for the summer holidays."
Britain's Vodafone, the world's biggest mobile phone company by revenue, is exploring a bid to buy T-Mobile UK, the Financial Times reported Monday. Both Deutsche Telekom and Vodafone have declined to comment on the matter.
In Frankfurt, T-Mobile shares surged 2.31 percent to 8.42 euros, while Vodafone shares gained 0.39 percent to 116.95 pence in London trade.
The FT, citing people familiar with the situation, said that Vodafone was considering making an offer or setting up a joint venture, in a move that would give it a 40-percent share of revenue paid by mobile phone users in Britain.
Currently Vodafone has a market share of about 25 percent, compared to 27 percent for O2, owned by Spain's Telefonica (Madrid: BTEF.MC - news) , 22 percent for France Telecom (Paris: FR0000133308 - news) 's Orange, 15 percent for T-Mobile and eight percent for Hutchinson Whampoa's 3.
Deutsche Telekom (Xetra: 555750 - news) , which owns T-Mobile UK, has appointed JPMorgan to advise on the strategic options for the business after several years of underperformance, the FT said.
On Friday, Wall Street shares ended mixed as investors mostly locked in profits from a strong rally the previous day and turned cautious ahead of the weekend.
In Asia on Monday, Tokyo ended down 0.95 percent and Hong Kong slipped 0.39 percent, ending a three-day winning streak, as investors took profits ahead of a series of economic reports due this week.
Investors were reluctant to push shares up ahead of key economic data due this week, including monthly US jobs data and the Bank of Japan's Tankan survey of business confidence.
While the pace of job losses in the recession-struck United States appears to have slowed recently, the unemployment rate hit a 26-year high of 9.4 percent in May.
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