The Stockholm market provided the biggest shock in Europe yesterday with disappointing first-half results from Ericsson, the mobile phone maker. Shares fell 11 per cent to SKr182.50.
Although overall profits more than quadrupled thanks to strength in its network business, the consumer products division which includes mobile handsets made an operating loss which Ericsson blamed on continuing component shortages. It also warned that overall profit for the third quarter of the year would be lower than the first two.
Ericsson, the biggest Swedish stock by market capitalisation, helped pull down the general index in Stockholm by 4.4 per cent to 5,917.74. It also led Europe's telecoms sector down, with the Eurotop 300 index off 2 per cent.
Frankfurt was lower on profit-taking in the technology sector and as Deutsche Telekom extended its recent retreat. At 5.30 p.m. the Xetra Dax index was 95.34 lower at 7,384.80.
There were winners, however, including UK-based on-line retailer LetsBuyIt.com, which rocketed to an early premium of 84 per cent to its issue price of €3.50 as the stock made its debut.
In late afternoon trade, the loss-making company, which delayed its flotation and lowered its IPO pricing range due to tough market conditions, was quoted at €4.70.
Siemens, bruised by the news from Ericsson, dropped €2.70 to €175.30 ahead of third-quarter results next week.
Tourism group Preussag fell €1.05 to €31.35 as Morgan Stanley Dean Witter lowered its price target on the stock to €29 from €34 and repeated an underperform rating.
Retailer Karstadt Quelle lost €1.55 to €31.95 on profit-taking after Thursday's 9.7 per cent surge which followed news that chief executive Mr Walter Deuss, the target of investor criticism for months, was leaving.
Deutsche Telekom fell another €2.07 to €55.10, still under pressure from the view that it is prepared to pay too high a price for VoiceStream Wireless of the US.
HypoVereinsbank put on €1.28 to €69.03 as talks with Bank Austria over co-operation or a takeover entered a decisive stage.
Paris suffered from weakness in telecoms and oil stocks, with the CAC 40 closing 1.5 per cent lower at 6,464.12. France Telecom fell in sympathy with other telecom stocks as the market digested news of Ericsson's disappointing first-half results. France Telecom closed 3.4 per cent lower at €182.50.
