Bourses cut their losses as Wall Street spikes briefly

The threat of war and recession, and indications that Wall Street had significantly further to fall, left leading bourses with losses of up to 6 per cent in early afternoon trade. But when Wall Street turned another early slide into a brief spike, Europe cut its losses.

The FTSE Eurotop 300 was down 2.5 per cent in late trade, taking losses since September 11th to 15 per cent. At its worst for the day it was down 7 per cent.

Goldman Sachs yesterday cut its earnings forecasts for the FTSE Eurotop index for this year and next. It expects a fall of 12 per cent this year and a rise of 2 per cent in 2002, but cautioned that the new estimates were "still highly uncertain".

Among individual markets, Zurich led the pack with a 5.4 per cent tumble, while Amsterdam fell 3.4 per cent, Paris 2.3 per cent and Frankfurt 2 per cent. The day brought another welter of downgrades and portfolio adjustments. On another grim day for insurers, Germany's Allianz lost 8.3 per cent to €200 as it joined the massed ranks of companies forced to raise forecasts for damage claims. In France, Axa tumbled 10.3 per cent. Among the world leaders in reinsurance, Munich Re held its loss to 1.5 per cent at €234.49 but Swiss Re dropped 3.4 per cent to SFr129.50, one day after both companies raised their estimates for claims.

Technology companies had a torrid time, but many pulled back from their lows of the day. Philips, which been down 10 per cent at one point, ended 5 per cent lower at €18.03 as downgrades followed its warning of weaker semiconductor sales.

Oil stocks were sharply down, with Royal Dutch falling 6.2 per cent to €45.78, Repsol YPF down 6 per cent to €14.26 and Total Fina Elf off 5 per cent at €130.20.

The airline sector remained beset by worries, although Lufthansa edged up 1.1 per cent to €9 and Swissair jumped 4.4 per cent to €47. But Air France dropped 3.9 per cent to €9.21 and KLM lost 4.4 per cent to €8.65.