Techs tumble as bad Nasdaq news kicks in

Europe's technology shares tumbled late in the day as the Nasdaq opened lower, adding to bad news from Yahoo! and wiping out moderate gains earlier in the session.

France's Alcatel confirmed the picture from other telecom equipment makers, saying mobile handset sales had slowed in the past two months. But it maintained its earlier forecast that overall sales growth would be 20-25 per cent this year. Alcatel's shares were volatile, dipping 2 per cent at first, moving into the black for most of the day, but then closing 4.1 per cent lower at €45.39.

In the Internet sector, the profit warning and boardroom shake-up at Yahoo! hit Europe's already battered stocks. Terra Lycos fell 10 per cent, T-Online 5.4 per cent, Wanadoo was off 7.2 per cent and Tiscali fell 1.5 per cent. Wanadoo's parent group France Telecom completed the sale of its record €16.4 billion bond, and ended unchanged at €67.20.

Drugmakers were under the weather in Germany and France. Altana tumbled 18 per cent to €138.10 after the German group said that late phase trials of a respiratory drug had not lived up to expectations, threatening the project.

Aventis, the Franco-German drugmaker, lost 5 per cent to €86.10 on speculation that Kuwait Petroleum Corp (KPC), its biggest shareholder, might be about to reduce its stake.

Shares in Germany's state-owned bank Bankgesellschaft Berlin hit their lowest level in almost a decade after the bank revealed that two senior executives were leaving, and the country's banking watchdog is holding an investigation into its property business. The shares dropped 6.7 per cent to €10.45 in late trade.

In the transport sector, SAirGroup took another tumble, losing 6.6 per cent in early trade as investors fretted about the abrupt departure of Moritz Suter, its new chief executive. But the shares recovered to close just 0.6 per cent lower at SFr200 after an official said a new head of the loss-making airline would be named in the next few days.