Sentiment in Frankfurt crumbled after a swirl of adverse rumours hit market heavyweight Deutsche Telekom and cast a cloud over the rest of the technology sector.
Telekom fell steeply in frantic trading after press reports suggested the group was set to launch a $100 billion (€105 billion) takeover bid for Sprint which earlier this week abandoned plans to link with WorldCom. The stock, which tumbled more than 6 per cent in the first 30 minutes after the opening bell, was €5.44 or 8.6 per cent lower at 5.30 p.m. Telekom refused to comment on the rumours.
Other tech shares tracked the opening weakness on the Nasdaq. SAP fell €15.8 to €193.75 and Epcos came off €11 at €1 09.95. Siemens shed €3.70 at €153.30.
Renewed interest rate concerns hit banks. Prospective merger partners Dresdner Bank and Commerzbank fell €1.19 to €41.91 and €1.20 to €36.80 respectively.
Paris had its biggest one-day fall since May 19th, losing more than 3 per cent as technology and telecoms stocks both tumbled. STMicroelectronics was the hardest hit stock in the CAC blue-chip index, falling 9 per cent to €63.50. Alcatel lost 7.4 per cent to €64.10 in line with others dependent on mobile phone prospects. France Telecom was down 5.7 per cent to €149.90.
Amsterdam fell 16.43 or 2.4 per cent on the AEX index as tech leaders came in for heavy selling. Philips lost €3.72 at €49.08 and telecoms leader KPN €2.74 at €45.11.
Madrid was pulled down by concerns about new government regulations for banks and power companies, while the Europe-wide fall in telecom stocks took Telefonica down 3.4 per cent to €21.50. The Ibex 35 index lost 2 per cent to 10,366.4.
Helsinki plunged 8.6 per cent. Nokia tumbled 10.7 per cent with Sonera even harder hit with a fall of 11.4 per cent. The Hex general index closed 1,340.77 lower at 14,283.90.
Milan was lower in line with its neighbours. The Mibtel index finished 594 down at 31,281.
