Insurance analysts were jolted from their seasonal slumbers yesterday when a flurry of disturbing rumours sent Zurich Financial clattering down to a fresh low for the year.

Stories that it had been wrong-footed in derivatives markets, been hit by write-offs on its private equity business and faced a damaging broker report swept the shares down to SFr471 (€310) at one stage before the buyers gingerly returned.

The fact that the rumours coincided with news that a 25 per cent owned associate company InCentive Capital had run heavily into first-half losses did nothing to aid sentiment. And a denial from ZF that it faced problems related to its private equity holdings was also of scant avail. By the close of a hectic session, the stock was 9.4 per cent lower at SFr480.

Construction leader Hochtief fell steeply after combining weak first-half figures with a profits warning. The group's statement provided a resounding echo to the news that German output in the second quarter was down to zero growth largely as a result of weak investment. Hit by restructuring, Hoctief slumped into loss for the first half and warned that full-year profits would fall considerably short of 2000. The shares fell 14.2 per cent to €19. Nestle had a torrid session after Goldman Sachs cuts its target price from SFr440 to SFr420 and reduced earnings estimates for the foods sector leader. The stock lost 3.3 per cent at SFr352 (€231.69).

In telecommunications there were better signs, although they hardly amounted to a sea change. Deutsche Telekom stopped falling for the first time in a week, gaining 2.8 per cent to €16.75.

Pharmaceutical company Bayer, whose shares fell off a cliff earlier this month when it withdrew its anti-cholesterol drug Baycol from the US and other markets, fell a further 2 per cent to €34.18 yesterday when it announced it was also pulling the drug in Japan.