More bad news from blue-chip technology groups, hardly unexpected, but still painful for the markets, brought a halt to a three-week recovery for the sector.
The setback was exacerbated by the overnight 4.4 per cent tumble in the Nasdaq, and caution ahead of a further raft of US results, including Microsoft, after Wall Street closed last night.
Germany's SAP, Europe's largest software manufacturer, began the rout as the group cut its full-year sales outlook and unveiled quarterly results at the lower end of expectations. The shares tumbled 12.8 per cent to €110.65. The news brought a torrent of downgraded recommendations for SAP.
Anglo-Dutch IT services group CMG ensured there was no let up to the gloomy mood as it warned of deteriorating trading conditions in the UK and announced 470 job cuts. The shares plummeted 19.1 per cent to €3.74 in Amsterdam.
ASML lost 9.6 per cent to €14.59 as investors swapped stock for notes. The French-based STMicroelectronics dropped 5 per cent to €30.55 after it said it expected fourth-quarter sales to be close to third-quarter levels.
Philips, the electronics leader, was not immune to the gloom, falling 3.4 per cent to €24.56 . France's Alcatel lost 4.4 per cent to €16.15, while Nokia dropped 5.6 per cent to €21.14. The company, which reports today, is expected to post a 25 per cent fall in year-on-year profits due to weak demand and increased competition.
Oil stocks pushed lower as the price of crude slipped to a two-year low and investors turned nervous ahead of next week's run of third-quarter results from the US. Conoco and Exxon report on Monday and Tuesday.
Royal Dutch fell 4.1 per cent to €57.40 and TotalFinaElf 2.5 per cent to €154.60. Repsol shed 3.4 per cent at 15.95, while Eni was off 3 per cent at €14.05 in late trading.
