Rallying euro fails to allay US concerns

European markets moved steeply lower with the three leading FTSE indices sliding more than 2 per cent

European markets moved steeply lower with the three leading FTSE indices sliding more than 2 per cent. A rally for the euro was overshadowed by a nervous start on Wall Street as concern built ahead of tomorrow's speech by the US central bank chairman.

The FTSE Eurobloc 100 index lost 2.1 per cent at 1,108.91. The FTSE Eurotop 100 index fell 2.5 per cent to 3,030.38 and the FTSE Eurotop 300 index 2.3 per cent at 1,322.33.

Frankfurt recorded its steepest single-day loss since the third week of April, closing 133.45 lower at 5,491.29 on the Xetra Dax index after a volatile session. SAP moved steeply lower as subdued interim results sparked worries about trading during the second half of 1999. Shares in the software group shed 14 at 386. Media reports of a restructuring - denied by the company - sent steel leader Thyssen Krupp modestly better, lifting the stock 30 cents to €23.31. Siemens eased €1.90 to €78.60 ahead of tomorrow's six-monthly statement. Banks were among the heaviest casualties as investors fretted about the outlook for interest rates. Dresdner lost €1.31 at €43 and HypoVereinsbank €2.90 at €65.10.

Paris ended close to its low for the day on profit-taking in several bluechip stocks. The CAC-40 closed 70.44 or 1.5 per cent down at 4,548.31, off a trough of 4,544.19.

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Investors sold technology companies heavily. STMicro-electronics fell €3.05 or 4.2 per cent to €69.70 and Alcatel finished €4.40 or 3.2 per cent lower at €132.10.

Amsterdam ended just above its low for the session with the AEX index off 13.62 at 575.25. Hints of slowing European growth from US giant Microsoft and unexciting returns from SAP, Germany's software leader, cut the ground from under Dutch technology stocks.

Baan tumbled 80 cents to €14.10 and ASM Lithography lost €5.55 or 8.3 per cent at €61.70. Philips, which along with ASM reports interims tomorrow, came off €5.50 at €102.55.

Milan extended its losses late in the day and by the close the Mibtel index was 520 lower at 24,617. Computer hardware group Olidata was in strong demand during its debut session on the view that the company and sector had strong upside potential. After being suspended several times for excessive gains, the shares closed at €3.80, a 40.7 per cent premium to the €2.70 IPO price.

Alitalia, more than 2 per cent higher at one stage, finished 1.4 per cent lower at €2.56. Ina shares were suspended shortly before the close for excessive price movements between trades. At that stage, they stood at €2.10, a loss of 8.3 per cent on the day.