Surging telecoms bolster Eurostocks

Telecoms and French glassmaker Saint-Gobain kept European stocks aloft yesterday, but markets slipped off their highs by the close as Wall Street began to retreat.

The telecoms sector, already one of this year's best performing groups, hit its highest level since April 2002. It ended up 1.1 per cent to 271.08 points.

Deutsche Telecom, Europe's largest fixed line phone carrier, ended up nearly one per cent after it said its key T-Mobile USA unit added 1.02 million subscribers in the fourth quarter, as it benefited from a rule change to grab customers from its rivals.

Deutsche's internet service provider unit T-Online fared less well as investors were disappointed with its subscriber increase. T-Online shares slid 4.5 per cent.

Telecoms were also buoyed by news that UBS investment bank had raised its price target on a slew of operators, including Deutsche Telekom, France Telecom and Danish telecoms operator TDC, whose stock rose 3.7 per cent.

TDC said it had acquired the remaining 80 per cent in mobile telephone reseller Telmore to hold 100 per cent of the company.

The FTSE Eurotop 300 index of pan-European blue chips ended up 0.18 per cent at 990.89 points, down from the session peak of 998.93 and below the 17-month high of 999.17 set last Thursday.

The narrower DJ Euro Stoxx 50 index was up 0.34 per cent at 2,884.25, below the session high of 2,911.43 - its best level since mid-July 2002.

Amid good volumes the number of gainers to losers was roughly three to two.

Saint-Gobain jumped 3.4 per cent after Societe Generale raised its fair value target for the French glassmaker to €46 from €40 ahead of 2003 results tomorrow.