Stocks down on Iraq fears, September 11th

European blue chips were broadly lower at mid-session today amid continuing doubts about an economic recovery and fears of an…

European blue chips were broadly lower at mid-session today amid continuing doubts about an economic recovery and fears of an impending US attack on Iraq.

France Telecom was one of Europe's leading losers, shedding 6.5 per cent as speculation mounted that chairman Mr Michel Bon would quit as chairman this week.

Britain's leading shares dropped at midsession, with music group EMI the biggest decliner on fears about its business and its blue-chip status.

In Europe, chip-related stocks such as ASML and Infineon Technologies were also under the cosh after Schroder Salomon Smith Barney cut its rating on the European semiconductor sector to "in line" from "outperform".

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By 11.15 a.m., the FTSE Eurotop 300 index of European blue chips was down 1.0 per cent at 919 points as decliners outpaced gainers by a margin of about four-to-one.

All but four of the narrower Euro Stoxx 50 components fell as the index shed 1.5 per cent to 2,580.03.

US stock futures painted a bleak picture for the afternoon session, with both the Nasdaq and Dow Jones industrial contracts indicating a weaker Wall Street opening.

Concern about a possible US attack on Iraq intensified over the weekend as US President George Bush's top advisers pressed a fledgling campaign for collective world action against Iraqi President Saddam Hussein.

There was also some nervousness ahead of Wednesday's first anniversary of the September 11th attacks on the United States.