Renewed concern about the prospect of higher interest rates and a rout among some recently high-flying technology stocks sent European markets sharply lower for a second straight day. The FTSE Eurobloc 100 index fell 52.32 to 1,317.80, while the FTSE Eurotop 100 dropped 139.54 to 3,493.54. The FTSE Eurotop 300 index was down 63.70 to 1,510.88.
Amsterdam was dominated by a profits warning from software maker Baan and the AEX index tumbled 33.19, or 4.9 per cent, to 642.25.
Baan crashed 31.7 per cent to €10.10 while telecoms group KPN fell 11.3 per cent to €89, giving back some gains booked late last year.
Consumer electronics group Philips followed other technology stocks lower, giving up 5.5 per cent to €133, in spite of an upgraded price target of €160 from Dresdner Kleinwort Benson.
Helsinki was hit by rate worries and the turnaround in sentiment towards the high-tech sector. The Hex general index tumbled 1,145.60 or 7.5 per cent to 14,184.92.
Nokia led the retreat with a fall of 8.6 per cent to €173.45, but up from an intra-session low of €167.09 which saw the stock down 12 per cent on the day.
Paris was hit by profit-taking in the banking, technology, media and retail sectors and the CAC-40 index closed with a loss of 245.35 or 4.2 per cent at 5,672.02.
Luxury goods group LVMH, one of the market's best performers last year, tumbled 9.5 per cent to €402.
Canal Plus gave up 7 per cent to €125.50 on disappointment over the valuation of the company, as Lagardere reportedly prepared to buy a 34 per cent stake in Canal Satellite for just over €1 billion.
Lagardere put on 2.3 per cent to €54.75, saying talks with Canal Plus had reached a decisive stage on December 24th and an agreement would be finalised in a few days.
Retailer Carrefour dropped 6.3 per cent to €171.90 as the European Commission extended its deadline for ruling on the merger between Carrefour and Promodes to January 25th.
Among technology stocks, Cap Gemini dropped 7.3 per cent to €237.20, tracking Amsterdam's Baan. France Telecom lost 5.3 per cent to €124.
Frankfurt saw a second day of heavy profit-taking after the string of record sessions up to the new year. The Xetra Dax index lost 163.81, or 2.4 per cent, to 6,586.95 as technology, telecoms and banking stocks bore the brunt of the damage.
SAP, the business management software maker, fell €23.50 to €580 in response to Baan's depressing statement. Deutsche Telekom, last year's top Dax performer, dropped €2.50 to €67.
