London--Europe's main stock markets diverged Tuesday after news that Finnish telecoms giant Nokia was in advanced talks to buy Franco-American rival Alcatel-Lucent.
The benchmark CAC 40 index in Paris dropped 0.73 percent to 5,215.59 points in mid-afternoon deals, while Frankfurt's DAX 30 shed 0.83 percent to 12,236.09 points.
London's FTSE 100 however edged up 0.05 percent to 7,068.11 points, as investors digested news that British annual inflation held at a record-low zero in March.
Also Tuesday, the International Monetary Fund hiked its eurozone growth forecasts but warned the outlook was fragile, with the Ukraine crisis and uncertainty over Greece's future in the single currency bloc adding to concerns.
The IMF said in its semi-annual World Economic Outlook that the Japanese and European economies were picking up pace as it stuck to its forecast for moderate global growth this year and next.
The IMF trimmed its outlook for the United States but said the country would remain the driver of world output in 2015 and 2016 while many emerging economies struggle with low commodity prices and turbulence in financial markets.
It said the plunge in oil prices was not yet generating all the potential benefits of more spending money in consumers' pockets.
The euro strengthened to $1.0668 from $1.0571 in New York late on Monday, before the European Central Bank's interest rate decision on Wednesday.
Nokia revealed Tuesday it was in talks to purchase Alcatel-Lucent, with the aim of creating a telecoms and Internet technology behemoth. No price was given.
In reaction, Alcatel-Lucent was the top riser in Paris, surging by almost 17 percent in initial trade. It later stood at 4.41 euros, up 14.25 percent.
In Helsinki, however, Nokia's share price plunged 4.31 percent to 7.43 euros.
"Investors have not reacted the way Nokia likely would have hoped following the announcement that the company might buy Alcatel-Lucent," said Spreadex trader Connor Campbell.
AFP
