Technology shares resumed the downward trend that began late last week following two-and-a-half months of steady rises. The IT sector fell more than 2 per cent while the telecoms and media sectors edged lower.

Chipmaker Infineon led the way, falling 11.2 per cent to €23.17 after it said it would ask shareholders for permission to issue 175 million new shares, worth €4.14 billion at that price, plus a number of convertible bonds.

Infineon's peer STMicroelectronics fell 1 per cent to €35.72 but chip equipment-maker ASML was up 1.7 per cent at €21.50.

Swedish telecoms equipment-maker Ericsson dismissed speculation that it was about to issue a profit warning, but the shares remained vulnerable all day. By the close they had fallen 3.1 per cent to SKr62. Nokia was down 2.9 per cent at €27.96 and Alcatel was down 3.9 per cent to €21.11.

Aerospace group EADS, the majority owner of Airbus, gave the first authoritative indication of output beyond the next 12 months. It said it expected Airbus to produce fewer aircraft in 2003 than the 300 forecast for 2002. The shares, which have hovered around €13 to €14 for the past month, edged up 8 cents to €13.48.

Alstom, the French engineering group, fell for the second day amid worries that one of its clients had asked to have delivery of its ship postponed. Alstom said this was just a rumour and P&O Princess Cruises, the client in question, refused to comment. The shares closed down 3.7 per cent at €12.90.

Concerns over the exposure of HVB Group to the cash-strapped media group Kirch sent shares in the German banking concern sharply lower. The shares fell 4.8 per cent to €33.64.

Allianz, Dresdner's merger partner, lost 2.5 per cent to €262.80. Deutsche Bank, meanwhile, fell 2 per cent to €74.90.

In the pharmaceuticals sector, Bayer fell 4.3 per cent to €35.30 while Aventis was down 2.1 per cent at €73.95.