GLOBAL MARKETS-Techs lift stocks, oil down after OPEC deal

www.forbes.com Reuters, 01.13.03, 7:28 AM ET (Updates with European prices, fresh quotes, changes dateline) By Nigel Stephenson

LONDON, Jan 13 (Reuters) - Shares rose on Monday, boosted by tech stocks after gains on the U.S. Nasdaq on Friday, while oil prices slipped following news of an OPEC deal to boost output. Still high geopolitical tension and worries over the U.S. economy kept the dollar close to three-year lows but safe haven gold pulled back from recent highs. European shares opened higher, buoyed by a potential battle for control of a British supermarket chain and by tech stocks after Wall Street's gain on strong earnings outlooks. European telecoms, such as Cable & Wireless <CW.L> and France Telecom <FTE.PA> were higher after Goldman Sachs raised its rating on the sector to "attractive" from "neutral". The OPEC cartel's decision on Sunday to raise production to stave off an oil price shock lent some support to energy stocks. At 1145 GMT, the FTSE Eurotop 300 index <.FTEU3> of pan-European blue chips was up 1.1 percent while the narrower DJ Euro STOXX 50 index was up 1.6 percent. However, analysts remained cautious amid worries about corporate earnings as well as a possible U.S.-led attack on Iraq. "In the short term the market will be driven by the reporting season and my fear is that European companies' 2003 guidances are going to be revised downwards," said SG Securities European equity strategist Alain Bokobza. "On top of that we still have the Iraq problem and the oil market question mark hanging over the market." British grocery group Safeway <SFW.L> was up nearly five percent after J Sainsbury <SBRY.L> said it was mulling a 3.2 billion pound ($5.14 billion) bid for the firm. Another store group, William Morrison <MRW.L>, bid for Safeway last week. Tokyo markets were closed for a holiday but shares rose around three percent in South Korea <.KS11> and Taiwan <.TWII>. U.S. stock index futures were higher, indicating Wall Street would open firmer.

OIL SLIPS Oil prices slipped after the Organisation of the Petroleum Exporting Countries on Sunday increased production limits by seven percent to compensate for reduced output from major exporter Venezuela which has been in the grips of a strike for six weeks. Brent crude for February was down 41 cents a barrel at $29.26. U.S. light crude was at $31.47, compared with $31.68 at the New York close on Friday. Oil traders said the fall in prices was limited because the output increase of 1.5 million barrels was expected. The dollar, already under pressure over North Korea's decision last week to pull out of the Nuclear Non-Proliferation Treaty and continuing fears of war in Iraq, took another hit on Friday from gloomy U.S. employment data. It lifted slightly off multi-year lows on Monday as dealers looked ahead to data due later this week on the state of the U.S. economy. The euro <EUR=> was trading at $1.0542, off Friday's high of $1.0585, its strongest since November 1999. "All the focus will be on U.S. data and whether it is showing signs of strengthening economic activity. The answer seems to be it's still pretty mixed -- the economy is bouncing along the bottom," said Ryan Shea, senior international economist at Bank One in London. The dollar was stable against the Japanese yen <JPY=> at 119.20 and was still close to a four-year low against the Swiss franc <CHF=>. Safe haven gold, which hit its highest for almost six years last week on the mounting global tension, pulled back slightly on the dollar's tentative recovery and on Wall Street's Friday gains. Spot gold <XAU=> was trading at $352.25 an ounce, compared with $354.30 in late New York trade. Yields on euro-denominated government bonds rose sharply as prices were weighed down by firmer stocks and ahead of an auction of Italian debt. The yield on the two-year German Schatz note <EU2YT=RR> was yielding 2.72 percent, up nearly seven basis points. Two-year yields set a 3-1/2 year low of 2.62 percent last week. The 10-year German Bund <EU10YT=RR> was yielding 4.32 percent, up 5.4 basis points. In the corporate bond market, France Telecom <FTE.PA> <FTELEC=> was preparing to sell three billion euros of bonds later this week, lead managers for the issue said.