Volatility in the technology, media and telecoms sectors continued after the latest results from North American technology heavyweights. Disappointing revenue growth from Canada's Nortel Networks triggered concerns about prospects for the telecom equipment industry. The effect was compounded by AT & T which slashed its growth outlook.
French peer Alcatel fell 8 per cent to €74.40, one of the most heavily traded stocks in Europe with turnover of 1.35 billion. Mobile phone maker Ericsson fell 4 per cent to 124.50 Swedish krone, and rival Nokia lost 1.7 per cent to €47.55.
The midcap French stock Highwave Optical fell 18.7 per cent to €161.60 before being halted limit down.
Telecoms stocks, which bounced up strongly on Tuesday, were much more mixed yesterday. Jim Ross, head of telecoms research at ABN Amro, said the bounce had been the result of large scale activity by hedge funds, which tend to target the sector because of its size and liquidity.
With the sudden end to the Italian auction, hedge funds rushed to close off short positions by buying shares. Mid-sized telecoms were mostly down. Sonera fell 3.8 per cent, Equant 3.7 per cent and Telia 2.3 per cent. But the big caps did better, with Deutsche Telekom and France Telecom 1-2 per cent higher.
There was a mini-bloodbath in the Swedish Internet consultancy sector, after disappointing news from three consultancies. Framfab and Icon Medialab, investor favourites during the last 12 months, both said third quarter performance would fall short of expectations, while Cell Network reported wider than expected losses. Framfab fell 28 per cent to SKr31.20, a one-year low, while Icon and Cell both fell almost 14 per cent.
Among media companies, Recoletos, which publishes some of Spain's most popular newspapers, had a lacklustre debut on the Madrid stock market. Shares closed at €11.60, 3.3 per cent down from the offer price of €12, itself down from a range of €12.75-€15 indicated before the IPO.
In the FTSE Eurotop indices, IT was the worst performer, down 4 per cent, followed by electronics and computers, with telecoms and media sectors also negative. Serono, Europe's biggest biotechnology company, fell another 8.6 per cent to SFr1,650. In the last two days its shares have lost all the 13 per cent they gained after its third quarter results. Its profits turned out to contain a large element of extraordinary gains, such as a capital gain on a stake in Signal Pharmaceuticals.
EADS, the pan-European aerospace company formed from the merger of French, German and Spanish entities, released its first set of results. Shares rose 3.1 per cent to €21.75 after releasing first half results.
