Deutsche Telekom, out of step with a generally buoyant telecommunications sector, fell heavily after releasing disappointing third quarter results. The underlying loss was worse than expected at €3.1 billion. In late trade the stock had fallen to €17.27, down 1.6 per cent in 23.1 million shares traded.

The results included the US wireless telephony company VoiceStream for the first time. Kai-Uwe Ricke, chief executive of T-Mobile which groups all Telekom's mobile units, said VoiceStream would generate positive earnings at the EBITDA level next year.

France Telecom, which last week pleased analysts with a 32 per cent rise in sales, rose 3.8 per cent to €41.47 and Spain's Telefonica 4.6 per cent to €13.34.

Another group reporting gloomy news was telecom equipment maker Alcatel. The French firm said it had plunged into the red in the third quarter, and the full year would also show a loss. It announced another 10,000 job cuts in Europe, encouraging investors to feel it was tackling its problems. Analysts also pointed to the cut in inventory levels. The shares rose 6.8 per cent to €16.77.

Third quarter results from Deutsche Bank, which showed a strong trading performance but unexpected asset losses, sent the shares 4.1 per cent higher to €61.72. Analysts noted costs had been contained and earnings were not based on the sale of assets.

There was surprise, however, that Deutsche, Germany's largest bank, had confirmed a loss from financial investments of €408 million in the third quarter due to a collapse in asset values after the September 11th attacks in the US, especially in the telecommunications and technology sectors.

Commerzbank also put in a strong showing, in spite of a downgrade from Goldman Sachs. The shares jumped 4.4 per cent to €18.46. Spanish banks also remained in focus after sharp falls earlier in the week. SCH climbed 2.1 per cent to €8.55 on hopes the economic package from Argentina would quell concerns about a debt default.