Boost for UK Internet, telecoms stocks - analysts
By Dan Lalor
LONDON - British Internet and telecoms stocks should benefit from the lack of millennium bug problems so far, analysts said.
The broader market, by contrast, has to contend with a chunky decline on Wall Street overnight and its own record-breaking run in December.
"The fact there have not been any major Y2K problems will be good news. Some of the Internet stocks are going to be pretty strong," said Williams (LSE: WLMS.L - news) de Broe analyst Nigel Hawkins.
London dealers return to their desks today after a New Year break that began in the early afternoon of December 30, a longer holiday than in other leading financial centres which were all open on Monday as usual.
CCF Charterhouse economist Richard Jeffrey foresaw light trading in London on the first day back and the probability technology stocks could do well "given there have been few glitches" over the New Year period.
Technology and telecoms stocks have already led the way in overseas markets after the millennium bug proved elusive. The United States said it was already winding down its Y2K operations after claiming the bug had been "squashed".
TECHNOLOGY STOCKS OFF TO FLYING START
European technology stocks scored big gains early on Monday when trading resumed, although they were dented towards the close by a weak opening on Wall Street.
But comments like the "squashed bug" helped the tech-driven U.S. Nasdaq index to hit fresh highs. It rose 1.5 percent to 4,131.15 despite falls in broader U.S. stock market indices.
The Dow Jones industrial average of 30 leading companies lost 1.2 percent to 11,357.51, while the Standard & Poor's 500 index fell 1.0 percent to 1,455.17.
Jeffrey said the broader British market could well take its cue from those declines. "We may start the year where we ended the last one. That is with the chance of some profit-taking after a good run."
The FTSE 100 index of Britain's leading listed companies ended 1999 at 6,930.2, up 17.8 percent (1,047.6 points) on the year. December alone accounted for 333 points of the gain.
In terms of specific stocks, Hawkins at Williams de Broe said: "There were a number of recommendations in the press for telecoms including ones like Marconi, but particularly for Cable and Wireless (LSE: CW..L - news) which was tipped in three papers. |
