Nokia earnings forecast gives tech sector heart

Nokia put heart back into Europe's technology sector yesterday by saying it may beat its fourth-quarter earnings target.

Nokia put heart back into Europe's technology sector yesterday by saying it may beat its fourth-quarter earnings target.

Tech stocks, which had been in retreat for the previous two sessions, gained about 3 per cent and telecommunications stocks halted their downward trend. Nokia said it would gain significant market share this quarter thanks to a new range of internet-enabled mobile phones. Earnings per share would be at the upper end or even above the €0.18-€0.20 range it had earlier indicated.

Nokia's shares rose 4.8 per cent to €28.75 and helped lift the telecom equipment sector. Ericsson was up 3.2 per cent to €64, Alcatel was up 2.9 per cent to €21.96 and the electronics and engineering group Siemens rose 3.3 per cent to €72.40.

Ericsson said it had found buyers for $1.5 billion of loans it made to its customers to help them buy equipment. The operation adds $300 million to Ericsson's cash flow, a closely-watched number by shareholders as it indicates whether Ericsson will need to tap them for new funds. Nokia's better view was echoed by Sagem, the French maker of telecoms and defence equipment. The company predicted a rosier 2002 as the mobile phone market recovers and said it was looking for an industrial partner for its handset division. However, the shares shed 0.9 per cent to €71.80.

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Vivendi Universal, Europe's biggest quoted media group, fell 4.4 per cent to €56.50 after saying it was in talks with USA Networks to purchase its entertainment assets. There was concern that Vivendi may overpay following a newspaper report quoting a figure of $13 billion to $18 billion. Mr Jean-Marie Messier, chairman of Vivendi, dismissed the report.

Chipmaker STMicroelectronics slipped 0.3 per cent to €36.07 after announcing the private placement of 60 million shares had been priced at €35.75 each. The shares were sold by France Telecom and Finmeccanica, reducing their holding in STMicroelectronics from about 33 per cent to 26 per cent.