Technology stocks were pushed down further after warnings from US companies and nervousness about what Nokia might say at its analyst conference today. The FTSE IT index was at it lowest in its four-year history.
Frankfurt DAX: 4,354.82 (-79.03); Paris CAC: 3,935.58 (-69.35)
Alcatel fell 6.3 per cent to €9.46, a record low, while Nokia was off 5.6 per cent to €13.28 and Ericsson lost 1.2 per cent to SKr17.10.
IT services group Cap Gemini, whose shares hit a five-year low last Friday, said yesterday it would unveil a "transformation" plan next week, although it did not say whether this would include job cuts. Last year, it cut 9 per cent of its workforce.
Cap Gemini's statement did little to dispel the gloom and the shares fell 4 per cent to €45.70.
The bad news from US chipmaker AMD sliced 5.6 per cent off ASML, the Dutch maker of equipment for the chip industry. Electronics group Philips was down 3.1 per cent at €28.39.
Memory chipmakers were under pressure from a US investigation into alleged price fixing. Infineon of Germany said it was aware of the investigation but did not know if it was being targeted. Its shares fell 5.3 per cent to €15.92.
France Telecom hit a lifetime low of €15 with a loss of 8 per cent. It was €35 as recently as the end of March and €50 last November.
Deutsche Telekom fell 3.9 per cent to €10. JP Morgan cut its share price target to €14.90, saying: "The key issues continue to be debt levels and the lack of progress in reducing this debt."
But Telekom Austria rose 5 per cent to €8.25, following a sharp slide this month as worsening sentiment caught up with the stock.
Two weeks ago, the company announced that Telecom Italia had permission to sell up to half its 29.8 per cent stake in the second half of this year, creating an overhang in the market.
