Disappointing sales figures from food and beverage group Nestle and life sciences giant Novartis sent Zurich tumbling. The SMI index, down 174.8 or 2.4 per cent at 7,125.4, registered the largest loss of the day among the leading bourses.
Nestle tumbled 4.6 per cent in early response to results that came late on Wednesday, a day earlier than the market had expected. Sales growth for 1998 of 2.4 per cent was well below expectations and the shares, which traded at more than SFr3,000 (#1,869.4) early in January, finished SFr107 (#66.7) down on the day at SFr2,550 (#1,589).
Novartis lost SFr164 (#102.2) or 5.7 per cent to SFr2,715 (#1,692) after announcing sales rose only 2 per cent in 1998, and fell 3 per cent in the fourth quarter. Roche initially picked up to SFr18,390 (#11,459) on switching out of its rival, but finished SFr10 (#6.23) easier at SFr18,090 (#11,272).
UBS outperformed among the financials. A SFr2.50 (#1.56) rise to SFr442 (#275) was attributed to speculation the group might announce a share buy-back at a meeting with investors on Monday. Rumours suggested Swiss Life might be planning to buy the 25 per cent stake held by UBS, leaving the banking giant with SFr3 billion (#1.87 billion) in cash.
Frankfurt ended 33.70 lower at 5,163.45 on the Xetra DAX index. Although a session best of 5,234.22 was reached in early trading, the main thrust of the day was on the downside.
Deutsche Telekom, buoyed lately by broker upgrades and acquisition speculation, ended #1.89 lower at #38.61. Banks also lost ground. Dresdner came off #1.60 at #36.10 and Deutsche Bank lost 70 cents at #49.40.
SAP rallied #5.30 at #310.10 after sliding to a 12-month low on Wednesday in the wake of a profits warning from Dutch rival Baan. Meanwhile, share buy-back news got firmly behind Schering. The shares gained #2.70 at #112.70.
Paris met with steady selling and the CAC-40 index came off 35.98 at 4,154.03, with the heavyweight sectors under fire, notably banks and oils. BNP shed #3.95 at #77.55 and CCF #1.40 at #81.75. Societe Generale lost 80 cents at 157.2. Oils were weak, with Total down #3.40 at #90 and Elf Aquitaine ending #1.50 lower at #97 in spite of a more resilient earnings report than expected from US oil giant Exxon.
Danone found itself caught up in the broad rerating of the global foods sector following news of weak sales and operating margins from Swiss giant Nestle. The shares came off #11.40 or 4.9 per cent at #220.60.
In Amsterdam a number of heavyweight stocks ended down, notably Unilever, which came off #2.45 at #67.95. Among cyclicals, Hoogovens, a weak market lately, racked up the heaviest losses of the day, sliding #1.50 or 6.2 per cent at #22.75.
(# - Euro)
