TMTs have a difficult day as investors get nervous

Technology sectors had a difficult day as investors decided some of the rises of last week may have been overdone.

France Telecom's lower-than-expected flotation range for shares in its mobile offshoot Orange had a negative effect on the sector. France Telecom slipped 1.1 per cent to €94, although it was down more than 3 per cent earlier in the day.

Deutsche Telekom was off 4.5 per cent at €37.

Orange shares, due to start trading on February 12th, will be €11.50 to €13.50, valuing the company at €55 billion to €65 billion, about 60 per cent below expectations at the peak of the market last year and 20 per cent below more recent estimates by investment bankers.

France Telecom, which would raise €7.9 billion from the initial public offering, has about €60 billion of debt that it hopes to halve by the end of next year.

Other telecom operators hoping to get IPOs away later this year include Deutsche Telekom, KPN and British Telecom. Deutsche Telekom has full-year results out today.

Technology companies recouped some of their morning losses, with SAP down 1.7 per cent in late trading and Cap Gemini closing 1.7 per cent lower. Nokia lost 5 per cent at one stage but ended 2.5 per cent lower at €42.10. Infineon was down 2.9 per cent, Alcatel 2.5 per cent and Equant 2.4 per cent.

The troubled Internet company Letsbuyit.com lost a further 35 per cent to just 18 cents, compared with its peak of €6.45, as the original investors took the opportunity to dump the stock after a "lockup" period expired. LetsBuyIt.com was the most heavily traded share on Germany's Xetra electronic trading system, with 70 per cent of all trades.

Cosmetics group L'Oreal outperformed as expectations grew for 2000 sales figures, due after the market closes today. The shares put on 3.4 per cent to €81.25 as analysts forecast a 17-18 per cent rise in sales for last year and said medium-term organic sales growth for the company could be in the 8.5 per cent to 9 per cent range.