European telecoms decline on Deutsche Telekom profits warning

In Europe on Monday the FTSE Eurofirst 300 added 0.3 percent to 1,517.07 on Monday despite declines in the telecommunications sector.

Telecoms were lower after Deutsche Telekom issued its second profits warning in six months, citing competition and currency issues. Citigroup lowered its recommendation on the German telecom from “hold” to “sell” and Deutsche Telekon dropped 4 percent to €13.60. Elsewhere in the sector, France Telecom fell 0.9 percent to €21.18, while Telecom Italia and Swisscom were each 1.5 percent lower, to €2.27 and SFr471.50 respectively.

Car and truck manufacturers was gains on the session. On rumors that it could be a target for Volvo, MAN added 2.6 percent to €78.86. Volvo was 1 percent higher on the talk, to SKr502, while Scania, the recent target of MAN’s failed hostile bid, was up 3.5 percent to SKr485. Fiat gained 2.8 percent to €16.67 on a target share price hike from JP Morgan.

The airline sector was up on merger hopes and on upgrades from UBS, which raised its recommendation on Lufthansa and Iberia from “neutral” to “buy” and hiked target share prices for both Ryanair and Air France-KLM. Lufthansa was up 1.1 percent to €21.38, Ryanair gained 1.3 percent to €11.04, Air France was 1.5 percent higher to €32.67, and Iberia gained 3.3 percent to €3.10. Meanwhile, Alitalia added 1.9 percent to €1.10.

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