Information technology slithered to the bottom of the day's sector performance chart, thanks almost exclusively to heavy selling at Nokia and Alcatel.

Nokia turned in solid 2000 results but spoilt the occasion by predicting a sales slowdown in the first quarter of the current year and the stock ran into a wall of what traders described as very genuine selling.

The Finnish mobile phones leader has shaded its forecast of handset sales in 2001 from a firm €550 million to between €500 million and €550 million. But what really upset investor sentiment was the group's comments about the toughness of operating margins. At the end of a "massively active" session, 81 million shares had changed hands as the stock first crashed to €35.90 before finishing down 6.8 per cent at €37.12.

Alcatel moved lower in sympathy, losing 2.2 per cent at €59.10 in 17.2 million shares traded. Ericsson, in the throes of outsourcing handset production, rallied 3.7 per cent at SKr110.

Mobile phone sentiment was further hit by confirmation that French operator Bouygues was indeed pulling out of the bidding for the next (third) generation of French mobile licences. Bouygues tumbled a further 4.3 per cent to €52.55 for a two-day fall of 9 per cent.

Elsewhere, operators had a relatively trouble-free ride. France Telecom gained 1.9 per cent at €97.75 and Deutsche Telekom 1.2 per cent at €36.30. Sonera, said to have gained from local switching out of Nokia, jumped 5.1 per cent at €21.65. Growing expectations for a 50 basis point cut in key rates by the US Federal Reserve helped debt burdened datacom network group UPC which shot up 8.6 per cent to €12.99 in Amsterdam.

Steel stocks were given a push by Deutsche Bank which has upgraded the sector to "buy". The bank predicts a turnround in the steel cycle by the third quarter of 2001 and sees the sector brushing aside the flow of negative earnings news that can be expected over the first half.

Preferred stocks are ThyssenKrupp and Usinor which added 1.8 per cent to €20.19 and 4.9 per cent to €14.67. The latter, which publishes results today, is upgraded to "buy" with a target price of €19. Switching within the sector left Anglo-Dutch group Corus 4.1 per cent lower at €1.17.