Technology firms buttress European stock gains

Technology stocks held European blue-chips aloft yesterday afternoon with Wanadoo a major winner on talk of a buyout by France Telecom, while a mixed Wall Street opening offered little direction.

At 1435 GMT, the FTSE Eurotop 300 index of pan-European blue chips was up 1.0 per cent at 992.25 points, its highest since January 29. The narrower DJ Euro Stoxx 50 index rose 1.1 per cent to 2,863.98.

"Europe is cheap in absolute terms and also relative to the United States," said Bernd Meyer, European equity strategist at Deutsche Bank. "The weak dollar is an issue, but Europe can digest it, given volume growth due to the global recovery."

Wanadoo jumped 8.0 per cent on speculation that France Telecom would buy the 30 per cent of the French Internet services provider it does not already own. France Telecom added 1.8 per cent.

But French drug maker Sanofi Synthelabo lost 2.3 per cent after the Financial Times newspaper reported that controlling shareholders Total and L'Oreal had signed an agreement committing them to Sanofi's bid for larger rival Aventis.

Aventis and cosmetics giant L'Oreal were up about half a percent, while oil major Total advanced 2.1 per cent after Goldman Sachs upgraded the stock to "outperform" from "in-line".

On Wall Street, the Dow Jones industrial average was down 0.16 per cent at 10,575.71 points, while the tech-laden Nasdaq Composite was up 0.19 per cent at 2,067.99.

Investors shrugged off the dollar's drop to a two-week low against the euro as currency markets decided that a statement from the Group of Seven finance ministers did not herald action to support the falling US currency.