A profit warning from France's Credit Lyonnais set the scene for a weak showing from the banking sector. Credit Lyonnais dipped 4.7 per cent to €41.42 as the bank cautioned that first-quarter results for 2001 would be down sharply compared with the same 2000 period, but in line with the trend seen in the second half of 2000. Chairman Mr Jean Peyrelevade told the annual shareholders' meeting that a poorer market environment and the impact of the US economic slowdown would hit its results for the first half of the year. Societe Generale lost 1.2 per cent to €71.85 as Schroder Salomon Smith Barney cut its rating to reflect the stock's recent strong performance and uncertain prospects for the coming year.
BNP Paribas was another loser, down 2.2 per cent to €98 as UBS Warburg cut its recommendation, but said the bank remained a core stock in its portfolio. Telecom shares were lower following news of a big share placing by Vodafone.
Deutsche Telekom fell 1.8 per cent to €28.68 and Sonera fell 2.2 per cent to €12.20. Shares also reacted to Morgan Stanley's changes to its recommended portfolio of European telecoms, which trimmed the weightings of France Telecom and Telefonica. France Telecom fell 3.6 per cent to €79.05 and Telefonica fell 0.9 per cent to €18.90. Morgan Stanley raised its weighting of KPN Telecom, the privatised Dutch operator, which rose 3.7 per cent to €14.70. KPN announced annual results for 2000, confirming that it was sticking with its earlier forecasts for the coming year.
Technology stocks were mostly higher, with Siemens up 2.2 per cent and Philips up 4.5 per cent. The chip sector pushed ahead in spite of declining computer memory chip prices.
STMicroelectronics was up 0.9 per cent at €45.85 and ASM Lithography was up 2.6 per cent at €31.33. But Infineon was hit by a downgrade from Merrill Lynch and its shares fell 4 per cent to €47.01 after a sharp rise since first-quarter results.
Oils were dull ahead of today's first-quarter figures from Royal Dutch. Bearish inventory numbers from the US, which sent crude prices lower, were the main culprit.
