Telecom, media and technology (TMT) stocks were dragged down by yesterday's weak start on the Nasdaq, which pulled close to its low for the year. Information technology was more than 5 per cent lower on the FTSE Eurotop index, with computers, telecoms and electronics also sharply down.
Paris, a Nasdaq-sensitive market, saw some of the biggest falls, with heavyweight France Telecom off 5.7 per cent to €108.50, consumer electronics company Thomson Multimedia off 7.7 per cent to €49.50, broadcaster TF1 down 7.9 per cent to €55.50 and chip-maker ST Microelectronics down 4.6 per cent to €50.25.
In Frankfurt, software-maker SAP fell 4.5 per cent to €232.70 and Epcos fell 6.1 per cent to €85.66.
Network services provider Equant, did rather better. Its Paris-listed shares closed 3.6 per cent higher at €40 after French newspaper Le Figaro reported that France Telecom was planning a bid.
Internet companies T-Online, Wanadoo and Liberty Surf all set new lifetime lows. T-Online, the offshoot of Deutsche Telekom, fell as low as €20.56 before recovering to €22.50, compared with its launch price of €27 in April. Wanadoo, offshoot of France Telecom, fell 4.4 per cent to a closing low of €14.10 and Liberty Surf was down 10.2 per cent to €18.40.
Financials were under pressure, tainted by rumours about junk bond losses that left US banks lower on Friday. Stories suggesting a loss of up to $1 billion at Morgan Stanley Dean Witter were swiftly dismissed by the US investment bank.
Switzerland's Zurich Allied was under pressure, losing 25 Swiss francs, or 3.1 per cent, to SFr773 ahead of the unification of the UK and Swiss groups into Zurich Financial Services next Monday. Deutsche Bank cautioned that the fundamental change in status for Zurich Allied, from a UK company to a Swiss company, was likely to result in significant selling by UK investors.
Airlines have had a turbulent ride recently on fuel cost concerns, but KLM, increasingly seen as a marginal player in an industry dominated by heavyweights, has had one of the rougher rides. KLM stayed out of favour, slipping a further 45 cents to €20.30 to extend its losses since the middle of July to more than 40 per cent. Ahead of this month's second-quarter results statement, the shares are trading at a significant sector discount.
