Most European markets retreated yesterday, with Helsinki showing the sharpest drop. Trading was dominated by a recovery in telecoms, while the planned Telecom Italia-Deutsche Telekom merger ran into political difficulties.
The FTSE Eurobloc 100 index, which covers leading companies in the euro zone, closed 4.23 or 0.4 per cent lower to 1,057.29. The FTSE Eurotop 100, covering countries inside and outside monetary union, slid 2.94 to 2,984.02 while the broader FTSE Eurotop 300 settled 1.92 lower to 1,296.91.
Paris succumbed to profit-taking, with the CAC-40 losing 29.42, 0.7 per cent, to 4,262.43 at the end of a quiet day.
France Telecom recovered healthily after the Italian government poured cold water on the planned Telecom Italia-Deutsche Telekom merger by saying the German government should spell out when it would sell its stake in Deutsche Telekom. Shares in the French carrier closed €2 higher to €76.15.
Other telecom stocks fared less brightly, with Alcatel down €5.50 to €115.50 and Equant down €1.20 to €78.
Frankfurt surrendered ground as Wall Street opened weak and the Xetra DAX index finished 38.75 lower at 5,187.89.
Deutsche Telekom edged up seven cents to €35.37 as fears grew that Italian opposition would sink the planned merger with Telecom Italia.
Deutsche Bank, the country's largest bank, put on €1.04 to €51.80 as it forecast a marked increase in earnings at its investment banking division this year. BASF slid €1.49 to €40.01 ahead of first-quarter earnings next week.
Amsterdam ended little changed despite support from telecom and technology stocks. The AEX index settled 0.33 lower to 561.23.
Dutch carrier KPN rose a healthy €1.55 or 3.8 per cent to €42.50.
Madrid ignored losses on Wall Street and the bigger European bourses to close 7.70 or 0.9 per cent higher to 879.68, boosted by a star performance from Telefonica. The carrier was the sharpest riser among European blue chips, adding €1.90 or 4.6 per cent to €43.38, powered by renewed merger speculation in the sector.
Milan was lower as concerns about the war in Kosovo and slow economic growth kept a brake on the market. The Mibtel index finished down 12 to 24,756. Telecom Italia put on 2 per cent to €10, still below the €11.50 offered by Olivetti.
Helsinki continued to swing, underperforming other European markets with a 146.23 or 2.1 per cent fall to 6,884.01 on the Hex index. Nokia, weighted heavily on the index, shed €3.15 or 4.1 per cent to €74 after a rise of almost 9 per cent on Thursday.
