EUROPE REPORT: European equity markets finished the week on a miserable note, as US stocks moved sharply lower in early trading and Ericsson slumped after announcing its second-quarter results and pricing a deeply discounted rights issue.
Frankfurt DAX: 3,891.88 (-208.9);
Paris CAC: 3,324.04 (-189.7)
Ericsson, the world's leading maker of mobile telecoms equipment, fell 18 per cent to SKr11.90, an eight-year low, after its second-quarter results showed lower sales than expected.The share price is now barely a fifth of its level at the start of the year.
Rival Nokia fell 5.8 per cent to €12.90 and French telecoms group Alcatel lost 12.5 per cent to €€6.30.
The chip sector failed to respond to better sales news from Samsung Electronics of South Korea, with European stocks following the other techs lower. STMicroelectronics was down 6.5 per cent at €24.34, Infineon down 3.3 per cent at €16.92 and ASML down 5.6 per cent at €14.88.
The telecoms stocks were on the slide, led by France Telecom, which shed 7.4 per cent to €14.22, and its mobile arm Orange, which fell 6.1 per cent to €4.90. Deutsche Telekom lost 4.7 per cent to €12.01 and Telefónica lost 5.1 per cent to €9.
The pharmaceutical sector was also struggling, with Swiss group Novartis shedding 6.1 per cent to SFr496 after an Indian drug company announced it had applied to sell a generic version of the antifungal treatment Lamisil in the US from 2005. Germany's Schering had another bad day as its shares extended Thursday's steep fall by another 4.3 per cent, to €48.82.
Insurance stocks got another mauling as sliding equity markets kept pressure on the sector. Zurich Financial tumbled 11.2 per cent to SFr496, Allianz fell 8.8 per cent to €162.7 and AXA shed 6.6 per cent to €13.57.
In the banking sector, Société Générale slumped 9.8 per cent to €51, Spain's BBVA eased 7.4 per cent to €9.85 and HVB fell 7.2 per cent to €26.12.
