European bourses continued to retreat, pushed lower by interest rate concerns. The FTSE Eurobloc 100 index lost 1 per cent at 1,084.01 and the FTSE Eurotop 100 index 1.2 per cent at 2,979.08. The FTSE Eurotop 300 index fell 1.3 per cent to 1,304.24.
Frankfurt stayed in profit-taking mood, slipping a further 1 per cent on the Xetra Dax index which ended 56.04 lower at 5,358.46. Software leader SAP was a major casualty, falling €21.70 to €437.50 amid broad profit-taking. Retailer Karstadt was also a notable faller, sliding €1.75 or 3.8 per cent at €44.20. Metro shed 68 cents at €49.96.
Mannesmann brushed aside market rumours that some sort of alliance was being cooked up with France Telecom and denied the story. The shares, up from a January low of €97, shed 26 cents at €159.19.
Deutsche Bank, underpinned by a profits upgrade at Goldman Sachs that stepped up earnings estimates for this year and next by 4.5 per cent, pared early losses to end off 5 cents at €65.65. Other banks were not so lucky. Dresdner fell €1.30 at €46.30 and HypoVereinsbank lost €1.86 at €57.11.
Paris was led lower after heavy falls for market heavyweights and the CAC-40 index retreated 63.81 to 4,658.54.
France Telecom fell €2.95 or 3.4 per cent to €83.55 and Renault came off €1.90 at €52.25. LVMH lost €3.00 at €293, not helped by rumours of an imminent Italian take-over, possibly in combination with local fashion house Prada.
Tyre giant Michelin came off €1.38 to €42.47. Pernod Ricard came off €2.85 at €63.50 after interim figures fell short of broker expectations.
Amsterdam tracked a steep fall for Philips to close with the AEX index off 3.65 at 556.12. Philips tumbled on negative broker comment, notably a Morgan Stanley downgrade. The stock lost €4.10, or 4.1 per cent, to €94.90. The media sector also attracted the sellers. Wolters Kluwer fell €1.50 to €29.90. Among financials, ING shed 6 cents at €53.54 in spite of a CS First Boston upgrade to "strong buy". Royal Dutch was a rare firm feature. The shares added 89 cents at €54.35.
Milan tumbled below the level at which the market began the year, dragged down by weak telecoms and some banks. The Mibtel index lost 372 to 23,482, below the 1998 closing level of 23,695.
Telecoms stocks made a weak start.
Disappointment over Telecom Italia restructuring continued to weigh on the sector. Telecom Italia fell 2.2 per cent to €8.28, Telecom Italia Mobile lost 1.8 per cent to €5.50 and Tecnost gave up 2.7 per cent to €1.93. Insurer INA extended Monday's 5 per cent loss with a decline of 0.9 per cent to €2.87, following the weekend deal between rival suitors Generali and Sanpaolo-IMI to split up INA's assets if the Generali take-over bid succeeds. Generali fell 1.6 per cent to 30.05 and Sanpaolo lost 2.4 per cent to 12.88.
