The technology shake-out continued yesterday in Europe as ASM Lithography, the Dutch manufacturer of chipmaking equipment and something of a star among high-tech stocks, fell more than 12 per cent after a profits warning. ASML said sales for 2001 would be 10 per cent to 25 per cent lower than 2000. The shares closed at €23. Deutsche Bank described the profits warning as "expected", saying: "We actually believe that fundamentals cannot get much worse for ASML. We reiterate our view that ASML has the strongest long-term fundamentals of any of the European semiconductor stocks. Our recommendation remains a buy with a 12-month price target of €45." But Schroder Salomon Smith Barney reduced its price target on ASML from €26 to €22.
Another tech victim was French computer services company Cap Gemini, which fell heavily despite a stronger-than-expected net profit for 2000 released on Thursday. The shares closed more than 9 per cent lower at €159.
Cap Gemini maintained its target of 14 per cent growth in turnover for 2001. But investment bank Lehman Brothers said: "The high exposure Cap Gemini has both in the US and France and the lack of visibility in the Ernst & Young part of the business that is still without a single consolidated reporting system gives us cause for concern." ING Barings cut its price target from €225 to €206. Brokerage KBC Securities cut its rating from "buy" to "accumulate" with a price target of €220.
TNT Post was comfortably the best-performing stock in the FTSE Eurotop 300 index, bouncing off 12-month lows in the aftermath of a big share offering by the Dutch government, to close 8.4 per cent higher at €24.40 in heavy volume of 16.9 million shares.
Renault powered ahead on a dull day for motor stocks generally. The shares, upgraded by HSBC from "reduce" to "hold", rose 3.8 per cent to €55. BMW finished 0.5 per cent ahead at €35.24 after an upgrade to "market outperform" at Goldman Sachs.
