Weak euro and strong oil prices send Paris lower

The Paris stock market fell back sharply as high oil prices coupled with the weak euro continued to trouble investors. The slide accelerated in the afternoon as US indices opened in negative territory, with the CAC 40 closing 1.9 per cent lower at 6,703.36.

Company results continued to play a prominent role too. The CAC's biggest decliner was industrial gases producer Air Liquide which fell 6.4 per cent to €138.50 after releasing first-half results which fell short of some expectations. Net profits and sales both rose but operating margins were slightly narrower. French broker CAI Cheuvreux cut its recommendation for Air Liquide from "buy" to "sell".

Good results were not enough to stop the bank Credit Lyonnais closing lower. It slipped 0.2 per cent to €42.68 after spending most of the day in positive territory after it reported that first-half net attributable profit had more than doubled, which was at the top end of expectations. There were 29 declining stocks in the CAC 40, spread across all sectors.

Frankfurt fell back after a session that almost held a mirror up to Thursday with both technology and chemicals sectors again under pressure. Negative broker comment, plus the profits warning on Thursday from US leader DuPont, kept the downside pressures firmly on chemicals stocks. Bayer lost €1.75 at €44.15 and BASF came off 71 cents at €41.95 for a two-day decline of 4.5 per cent.

Deutsche Telekom shed 91 cents at €44.80 with the Nasdaq steeply lower in early trading. Epcos fell €2.50 at €108.10 and Siemens €7.42 at €177.25. SAP shed €9 at €292 and Infineon €2.28 at €68.61.

The Xetra DAX index showed little change on the week after sliding 103.65 to 7,269.69 at 5.30 p.m. German time.

Amsterdam fell 8.42 to 686.48 on the AEX index after another depressing day for technology-related shares. ASM Lithography fell €1.63 at €43.40 and cable TV group UPC lost €1.02 at €26.98. Philips ended 65 cents lower at €53.20.

Financials also supplied downside pressure as investors fretted about interest rates in the light of the latest weakness for the euro. ABN Amro dropped 74 cents to €27.50 while ING weakened 94 cents at €75. Zurich's blue chips were broadly lower and the SMI index ended 49.1 down at 8,088.1.

Swatch Group rose SFr41 to SFr2,461 as it dismissed a newspaper report that chairman and chief executive Nicolas Hayek would step down in November and hand over to his son.