London - European stock markets were steady on Wednesday, consolidating gains made this week on expectations of a Greek debt deal, although French telecoms stocks slumped after Bouygues rejected a bid for its telecom arm.
The pan-European FTSEurofirst 300 index and the euro zone's blue-chip Euro STOXX 50 index were both flat, after solid gains made in the last two sessions that pushed the FTSEurofirst to a three-week high.
Bouygues fell 7.7 percent after the conglomerate's rejection of the Altice offer for its telecoms division.
Altice slid 6.2 percent, while shares in Numericable-SFR - owned by Altice - also slumped 10.7 percent. Shares in French rivals Orange and Iliad also weakened by between about 3 percent and 6 percent.
Bouygues' decision to turn down Altice's offer followed opposition from French President Francois Hollande's Socialist government who had expressed concern over the deal, saying it could be bad for jobs, consumers and investment.
“Once you start getting politicians involved in the mix, these deals always become very difficult,” Clairinvest fund manager Ion-Marc Valahu said.
Valahu said he had sold his Bouygues shares at 38 euros in April, although he still held shares in Orange.
Greece's benchmark ATG equity index - which had risen 15 percent in the last two days - slipped back by 2.3 percent, with the Greek bank index down 5.2 percent.
Greece's Syriza government expressed confidence on Tuesday that parliament would approve a debt deal with lenders, despite an angry reaction from some of its own lawmakers who accused it of caving in to pressure for more austerity.
Euro zone leaders have said that new budget proposals from Athens on Monday were a basis for further negotiations to unlock billions of euros in frozen aid and avert a default next week that could lead to a Greek exit from the single currency area.
The ATG is down 6 percent since the start of 2015 but the FTSEurofirst remains up by about 16 percent, since economic stimulus measures from the European Central Bank (ECB) have cushioned the impact of Greece on European markets.
Credit Suisse strategists increased the size of their “overweight” position in European equities and were confident a deal could be reached on Greece.
“We continue to see a very high probability of a temporary deal. Deposit outflows have now reached levels where weaker Greek banks are running out of collateral, and hence Syriza will likely have to compromise,” they wrote in a research note.
Reuters