France Telecom underperformed the sector, falling 4 per cent to €32.55. Pressure is growing on the shares ahead of next week's annual results.

Mr Michel Bon, chairman, said in an interview that the company was discussing with its auditors the level of its 2001 provisions. He said no provisions were planned for Orange, the mobile subsidiary, which he said was correctly valued on the balance sheet in spite of its slide in market value. Its market capitalisation is about €37 billion compared witFrankfurt DAX: 5,340.67 (-18.88); Paris CAC: 4,586.75 (-42.36)

Deutsche Telekom was also underperforming, slipping 3.6 per cent to €17.07. Chief executive, Mr Ron Sommer, speaking at the Cebit electronics fair in Hanover, damped hopes for the flotation of T-Mobile, saying it would not take place until the markets picked up. Following the collapse of Deutsche Telekom's sale of its cable assets to Liberty Media, the debt reduction strategy has become more dependent on T-Mobile's IPO.

A fifth profits warning in a year from Zurich Financial Services proved too much for investors, also smarting that the group was more than halving its dividend. To make matters worse, Zurich declined to reconfirm its 2002 profits outlook, first offered in December, when it said earnings growth should return to its medium-term potential this year. The group, Europe's third-largest insurer, said net profit for 2001 was $348 million on a self-defined "normalised" basis, far below the $700 million-$900 million range it indicated in December. The group cut its dividend to SFr8 from SFr17.15. Zurich's shares, already a shadow of their former selves, tumbled 5.1 per cent to SFr357. They had a dismal time in 2001, tumbling almost 60 per cent.

Crude oil prices were given an additional boost after the Iraqi vice-president said on Sunday that Baghdad would not allow UN weapons inspectors to return, raising fears of military action by the US. - (Financial Times Service)