Technology and telecom stocks continue to fall

Technology and telecoms stocks fell further yesterday, many to two-year lows, following the market's disappointment over interest rates.

France Telecom fell 7 per cent to €58.10, its lowest since November 1998, Telefonica was down 5.2 per cent at €16.82, KPN lost 7.9 per cent at €11.18 and Sonera was down 8.3 per cent at €9.90. Deutsche Telekom was under extra pressure after Moody's Investors Service put the company's credit ratings on review. The company was down 6 per cent at €25.02 in late trade.

Moody's move followed a similar one on Monday for British Telecommunications (BT). Both Deutsche Telekom and BT had hoped to float their mobile offshoots this year but poor market sentiment is weighing against them.

Losses at telecom equipment companies matched the broader picture, with Nokia off 4.7 per cent, Ericsson off 7.1 per cent and Alcatel down 4 per cent.

Deutsche Bank fell 4.8 per cent to €77.70. Dresdner Bank, another big US lender, lost 2.8 per cent to €43 while Commerzbank dropped 2.4 per cent to €29. Switzerland's UBS took a 3.5 per cent tumble to SFr234 while the less-exposed CS Group lost 1.5 per cent to SFr293. In French banking, Societe Generale dropped 4.7 per cent to €61.40 and BNP Paribas 2.3 per cent to €89.20.

The oil and gas sector was strong, topping the FTSE-300 Eurotop index as the oil price edged up on news that US gasoline and distillate stocks fell steeply last week. TotalFina put on 0.7 per cent to €154 and Spain's Repsol YPF was 2.7 per cent higher at €19.36.

The pan-European aerospace company EADS continued falling, losing another 3.4 per cent to €19.60 after Monday's announcement of net losses of €909 million.