Markets ended a depressing week in slightly brighter mood as Wall Street, which fell 4.5 per cent on the Dow Jones Industrial Average in the four days to Thursday, stabilised ahead of the Labor Day weekend.

The pain continued in the telecoms sector. Deutsche Telekom stopped falling but France Telecom hit its lowest level since January 1998, losing 4.4 per cent at €35.34.

KPN Telecom's performance was even worse, falling 22 per cent to a record low of €3.12 after talks with Belgacom were called off.

KPN said the two sides could not agree about valuations. KPN shares are now down 95 per cent from their peak last year. Volume of trade yesterday was more than 60 million shares, four times the next most active stock in Amsterdam.

KPN announces half year results on Monday.

It was a bad day for Dutch telecoms as it emerged that the competition authority is investigating whether companies have been engaged in price fixing. Names included KPN and mobile phone operator Libertel, whose shares fell 6.3 per cent to €7.40. The probe relates to levels of subsidy operators have provided to vendors of handsets.

In healthcare, Sulzer Medica fell 4.6 per cent to SFr125, although well above its worst of the day, as the picture on its US lawsuits suddenly darkened. On Thursday a Texas jury awarded more than $15m to three women who had had to have Sulzer hip implants removed. Mr Stephan Rietiker, Sulzer's chief executive, said: "It would not take many verdicts of this size before the money would run out, possibly forcing the company into bankruptcy." The previous day Sulzer had surged 19 per cent as another court judgment raised hopes for an early resolution of the lawsuits. France's Sanofi-Synthelabo edged up 0.4 per cent to €72.05 after beating forecasts with a 50 per cent jump in first half profits to €671 million.