Airlines faced a turbulent day, hit by company-specific news and concerns that the economic slowdown in the US would hit transatlantic carriers.

SAirGroup, suspended on Monday, had a bumpy ride as investors took their first opportunity to punish the stock after the group's dismal earnings report. The shares plunged 21.1 per cent to SFr140, a fall of 46 per cent from the late January high for the year.

German national carrier Lufthansa faced up to a volatile session after pilots threatened to escalate their pay dispute by balloting union members over a strike that could disrupt Easter travel. The shares ended 3 per cent down at #19.45, after hitting a low of #18.91.

Air France tumbled 6.7 per cent to #18.35, while Alitalia dropped 3.9 per cent to #1.68.

Technology companies suffered some nasty falls as the Nasdaq continued its plunge. Nokia was down 7.3 per cent to #25.25, Alcatel off 9.4 per cent at #30.59 and Ericsson down 5.5 per cent at a new two-year low of SKr52.

Finland's Sonera, which has sustained substantial falls recently, rebounded 4.3 per cent to #7.50. Dutch cable company UPC lost another 5.8 per cent to #6.36 after Monday's annual results revealed widening losses.

Software company SAP fell 11.3 per cent to #108.70 in late trade, its lowest since August 1999. Its share price was hit by profits warnings from its US peers Ariba and i2 Technologies. Merrill Lynch cut its recommendation on SAP from "buy" to "accumulate".

Germany's Allianz remained under pressure over its takeover of Dresdner Bank to create the world's fourth-largest financial group. Allianz fell 5.4 per cent to #299.88 and Dresdner Bank was down 3.6 per cent at #48.91.

French insurer Axa was another casualty, losing 5.7 per cent to #120.10 as speculation waned about a merger with Deutsche Bank.