FRANKFURT (AFX) - Shares were sharply higher in midday trade as oil prices fell and as index heavyweight Siemens, accounting for more than 9 pct of the DAX's weighting, soared as the market cheered news it is making an exit from the telecoms sector by merging its networks unit with that of Nokia, dealers said.
At 11.56 am, the DAX 30 index was 96.65 points or 1.80 pct higher at 5,472.66, having moved between 5,388.83 and 5,478.56 so far this session.
The MDAX was at 7,563.58, up 165.87 points or 2.24 pct, while the TecDAX was at 631.60, up 16.53 points or 2.69 pct.
The DAX futures contract was at 5,457.50, down 17.00 points or 0.31 pct, while bund futures were at 116.15, down 0.21.
The euro last traded at 1.2588 usd, against 1.2591 in morning London trade.
Siemens led large-caps higher, soaring 5.73 eur or 9.12 pct to 68.54, on the back of the network unit deal with Nokia, which dealers said was highly value-enhancing for Siemens as it will not pay anything to enter the joint-venture and is proof of restructuring success at the conglomerate.
'(This is) positive for Siemens given the problems they have had in restructuring their networks business and (it) gets them out of the telecoms market after (they sold) the handset business in 2005 to BenQ,' said one dealer.
'(This) shows Siemens as a management team (is) capable of real restructuring (and) asset rationalisation,' he added.
Landesbank Rheinland-Pfalz, reiterating its 'outperformer' rating and 85 eur price target on Siemens, said: 'The management of Siemens are with the Nokia deal presenting (proof of) further success in the restructuring of its problem units.'
Insurance stocks were a bright feature, with Allianz jumping 4.04 to 119.05 as Morgan Stanley said it is buying the stock in a strategy note, and Munich Re rising 2.65 to 102.90.
Auto stocks were also firm, as the euro fell against the US dollar and as oil prices declined, with Volkswagen adding 0.99 to 53.74, BMW gaining 0.51 to 38.41 and DaimlerChrysler climbing 0.35 to 37.60.
Bucking the trend, Altana slid 0.20 eur or 0.46 pct to 43.38, as the Financial Times Deutschland reported that it is considering financial investors for the first time as potential buyers for its struggling pharmaceuticals division, after failing to find a strategic partner in the sector.
Deutsche Post lost 0.10 to 20.27, while Henkel fell 0.35 to 85.15.
On the MDAX, Vivacon soared 1.11 eur or 5.33 pct to 21.95, while STADA dipped 0.57 eur or 1.84 pct to 30.38.
Puma added 9.06 to 277.34, as WestLB added the stock, along with shares in D&S Europe, Technotrans and United Internet to its small & mid cap focus list.
Over on the TecDAX, Conergy soared 3.85 eur or 9.23 pct to 45.58, while QSC dipped 0.06 eur or 1.47 pct to 4.02. niklas.magnusson@afxnews.com nm/jc1 COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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