The technology sector remained out of favour, with Ericsson continuing to weigh on sentiment. The mobile networks group lost a further 4.4 per cent to SKr26.10 following Monday's disappointing news that it will not return to profit this year. Shares are at a 51/2-year low and almost 90 per cent down from their peak in 2000. Morgan Stanley cut its price target for Ericsson from SKr35 to SKr20.

For other telecoms equipment makers, losses were limited.

Alcatel, with results out tomorrow, fell 0.5 per cent to €14.66. Nokia was steady at €18.76. WestLB Panmure upgraded Nokia from "underperform" to "neutral" with a target of €19, saying: "We do not expect news flow that could make the stock go down even further over the next six weeks." But IT services consultancy Cap Gemini fell 5.8 per cent to €67.80 as it reiterated its February forecast that first-quarter sales would be sharply down. It releases results tomorrow.

Chipmaker Infineon's quarterly operating loss beat expectations, narrowing by two thirds, from €564 million to 4178 million, while sales rose by 34 per cent. But the shares fell 1 per cent to €22.91.

STMicroelectronics, which released results on Monday after the market closed, rose 3 per cent to €35.68. It said it expected sales in the current quarter to rise 10 per cent against the previous quarter. Analysts at WestLB Panmure were cautious, saying: "The optimistic outlook is especially surprising in light of the recent careful statements from the cell phone companies."

France Telecom shed 2.1 per cent to €30.05, taking it back to its lowest level since February. Deutsche Telekom fell 1.1 per cent to €16.51 and Telia retreated 3.8 per cent to a record low of SKr32.80.

Holidays group Club Mediterranee fell 1.3 per cent to €46.20 after launching a €125 million convertible bond.