Bourses retreat on US inflation worries

Shares swung lower in Frankfurt as negative inflation news from the US triggered a dramatic flurry of selling in mid-afternoon. The Xetra DAX index, up 230 points over the two previous sessions, fell steeply, pushing down to 7,156.83 at one stage. It ended off 167.62 at 7,220.93.

Technology-related shares dominated the lower reaches of the day's performance charts. Deutsche Telekom fell €4.20 or 5.7 per cent to €70. Siemens, which hit €161 in the morning following strong results, finished down €4.40 at €151.60.

Deutsche Bank gave up 44 cents at €73.11 and Commerzbank €1.30 at €41. Insurance giant Allianz fell €10.20 at €406.73.

Paris ended 143 lower at 6,247.86 on the CAC-40 index after a volatile session which fell some way short of the recent norm for trading volume. France Telecom fell to €158.20 before recovering to a €163 close, down €5.70. Pay-TV leader Canal Plus had a similar see-saw ride, losing €15.40 at €196.60 after reaching down to €190.80 at one stage.

Amsterdam saw heavy selling of financials on a day when the European Central Bank lifted interest rates by 25 basis points. ABN-Amro lost 25 cents at €22.90 and Aegon €2.10 or 2.6 per cent at €80.10. ING came off €1.30 at €60.20.

Technology shares tracked the uncertain trend on Wall Street. Philips fell €1.48 to €46.21 and KPN tumbled €7.95 to €110.55.

In Helsinki, the Hex general index finished 762.01 higher at 16,854.36 after a brief foray into the red in the aftermath of the US figures. Nokia shot up 7.5 per cent to €59.80 after reporting a 76 per cent rise in first-quarter profit.

Stockholm, too, was a beneficiary of the Nokia numbers as Ericsson put on SKr38 to SKr768 (€94.12) on the eve of its results announcement. The general index closed 69.05 higher at 6,096.89.

Against the trend, AstraZeneca lost SKr19 to SKr377 (€46.20). The market became uneasy after a US magazine report raised questions about the effectiveness of Nexium, the successor to its blockbusting ulcer drug Losec.