What started as a weak day for technology stock steadily turned into a rout as disappointing news piled up and the Nasdaq opened by plumbing new depths for the year.
Big cap technology stocks such as Philips, Ericsson, Infineon and SAP took a pounding. Philips fell 6 per cent to €36.98, Ericsson was off 6 per cent at 111 Swedish krone, Infineon down 5.5 per cent to €43.29 and SAP lost almost 9 per cent to €174.85.
Even more alarming was the fate of Dutch IT services company Getronics, which plunged 41.6 per cent to €7.36 after it scaled back its forecast for operating margins in 2000 and said they would decline further next year.
In Germany, the Neuer Markt tumbled a record 10 per cent to an alltime low of 3,105 on the Nemax 50 index.
By these standards, telecoms were relatively unscathed. The big caps France Telecom, Deutsche Telekom and Vodafone saw falls of 2-3 per cent, although two alternative carriers, Colt and Energis, saw falls in double figures.
French mobiles and construction group Bouygues rose in morning trade after its hopes of winning a French mobile phone licence improved following a pull-out by Deutsche Telekom. But poor sentiment eventually overtook Bouygues and it closed 1.3 per cent lower at €54.
The Dutch cable network operator UPC, which fell nearly 24 per cent on Monday, was up nearly 9 per cent yesterday as market worries about its €4 billion credit facility eased.
In Madrid, the high-profile stocks had a difficult day, pulling the Ibex index down by its biggest percentage loss of the year to a new low of 9,252.5. Heavyweight Telefonica ended 4.6 per cent down and its Internet arm Terra Lycos fell as much as 13 per cent.
Earlier this year, Terra was the wonder of the European Internet sector, soaring 10-fold and single-handedly lifting the share prices of other ISPs. Yesterday it fell to a new low for the year of €16.21, not much above the €13 it launched at last November.
The Internet sector saw action in France too, where France Telecom's ISP Wanadoo confirmed it is in talks to buy Freeserve of the UK. Wanadoo fell 3.4 per cent to €12 while Freeserve rose 1.9 per cent to 148p as investors switched out from the former to the latter. But Freeserve warned that the price being talked about was unlikely to result in much of a premium.
