Stockholm Stocks Sink 3.4% on Ericsson Warning; Tokyo, South Korean Stocks Soar
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Friday October 20 11:29am
Source: Dow Jones
NEW YORK -- Sweden's main stock index tumbled Friday after disappointing earnings news from bellwether telecommunications-equipment maker Ericsson. Other European markets finished mostly higher.
Tokyo stocks jumped almost 3% as investor sentiment was bolstered by Thursday's rally in U.S. stocks. Shares also soared in Hong Kong, South Korea, Taiwan and Singapore.
The SX General Index in Stockholm slumped 179.85, or 3.4%, to 5048.86. But the index ended well above its intraday low of 4800, a loss of more than 8%.
Telefon AB LM Ericsson, the largest maker of cellular-phone networks, lowered its sales forecast for this year because of losses at its mobile-phone unit.
Shares of Ericsson plunged 16%. Problems at its mobile-phone unit prompted Ericsson to cut its full-year operating-margin forecast to between 6% and 7% from the 10% margin expected in the six-month report.
Ericsson's news followed better-than-expected earnings news Thursday from rival cellular-phone giant Nokia of Finland. Nokia rose 3.1% in Helsinki.
Elsewhere in Europe, the Financial Times Stock Exchange 100-Share Index in London closed up 57.4, or 0.9%, to 6276.3.
In Paris, the CAC-40 Index climbed 82.96, or 1.4%, to 6149.44.
The Xetra DAX Index in Frankfurt slipped one point to close at 6618.43 after rising 2.1% in the prior session.
Shares rose 1.1% in Amsterdam, 0.7% in Madrid and 0.6% in Milan, but Zurich's Swiss Market Index fell 41.10, or 0.5%, to close at 7722.70.
Despite the steep loss in Ericsson shares, technology shares generally closed higher across Europe, helped by Thursday's nearly 8% rally in the Nasdaq Composite Index and further gains Friday.
In Paris, STMicroelectronics closed up 4.4% after Lehman Brothers raised its per-share earnings estimate by 17% and maintained its "buy" recommendation on the stock. Thomson-CSF rose 1.1%.
However, Alcatel's optical division's tracking stock saw a tepid response from investors. Alcatel Optronics closed down 50 euros, or 0.6%, at 84.50 euros in its first day of trading in Paris. Parent company Alcatel rose 2.2%, to 76.45 euros, although well off the day's high of 79.60 euros.
In London, Bookham Technology rallied 7.7%. But Freeserve closed down 3.6% after being dropped as a component in the FTSE-100 index.
Shares of electronics giant Siemens rose 2.4% in Frankfurt on news of a stock option plan for employees.
Telecommunications shares also closed higher in Europe. London's benchmark stock, Vodafone Group, gained 2.8%, Colt Telecom jumped 6.5% and France Telecom climbed 6.3%.
The Dow Jones Euro Stoxx Index, which tracks companies in countries that joined the single currency, closed up 2.86 points at 403.96. The Dow Jones Euro Stoxx 50 Index was up 46.6 points at 4883.4.
The Dow Jones Stoxx Index of shares in European companies rose 2.27 points to 377.54, while the Dow Jones Stoxx 50 Index added 17.1 points to 4846.2.
In Tokyo, the blue-chip Nikkei 225 index climbed 387.65 points, or 2.6%, to close at 15198.73. Gainers overwhelmed decliners better than three to one, with more than 527 million shares changing hands.
The rally was driven by outside factors, traders said, principally Thursday's sharp gain on the Nasdaq Stock Market in the U.S. Finnish mobile-phone maker Nokia's solid results and its outlook for growth in the market also gave a boost to high-tech stocks, especially semiconductor and electronics parts makers, one broker said.
One negative was a report, subsequently confirmed, that Kyoei Life Insurance would seek bankruptcy protection from creditors. The news triggered sales of the Nikkei futures contracts and cash stocks in the index, trimming an early gain in the Nikkei 225 of better than 400 points by more than a third, but the index managed to retrace most of the downturn.
Players said impact of the failure of Japan's 11th largest life insurer was limited, in part because the market has been on the lookout for more bad news from the sector following the failure of Chiyoda Mutual Life Insurance earlier this month.
Hong Kong's Hang Seng index jumped 622.01 points, or 4.3%, to 15044.53, a level not seen since May. Telecom shares led the way, with blue-chip China Mobile rising more than 8%. Even battered shares of Pacific Century CyberWorks joined in the the upturn, but the rise was a muted 3% amid continuing worries about the telecom concern's debt load.
In South Korea, foreigners focused on scooping up semiconductor giant Samsung Electronics Co. after U.S. semiconductor shares soared Thursday. The world's largest memory chip maker's stock finished up by the daily 15% limit.
The Korea Composite Stock Price Index jumped 30.93, or 6%, to 545.97.
In Taipei, shares rebounded in reaction to better-than-expected September export orders and government stock-supporting measures disclosed late Thursday. The benchmark Weighted Price Index of the Taiwan Stock Exchange soared 323.50, or 6.4%, to 5404.78. Taiwan's main stock index plunged a record 6.5% Thursday to 5081.28, its lowest close in 4 1/2 years.
The Ministry of Economic Affairs reported earlier Friday that Taiwan's export orders rose 33.3% to a record US$14.3 billion last month. Meanwhile, industrial output in September rose 16.5% year-on-year.
In addition, the Ministry of Finance Thursday temporarily halved the daily downside limit for individual stocks to 3.5% from 7% during the period Oct. 20 to Nov. 7. The ministry also raised the ceiling on total foreign ownership in a listed company to 75% from 50%, and increased the cap on investment in Taiwan stocks by a single qualified foreign institutional investor to US$1.5 billion from US$1.2 billion.
Elsewhere in Asia, key stock indexes in Singapore, Malaysia and Thailand rose 2.1%, 0.6% and 0.2%, respectively, but shares in Jakarta lost 0.6%. |
