Oil stocks streamed lower as weak crude prices and a sector downgrade at Lehman Brothers appeared to take the shine off upbeat comment from Commerzbank.
Lehman cut the sector to "neutral". Commerzbank, in contrast, feels the market is over-discounting worst-case risk profiles for a number of European oil majors. It has upgraded TotalFinaElf to "accumulate" and Eni to "buy".
Total came off 2.2 per cent at €144.30 and Royal Dutch 3.9 per cent at €53.05. Eni fell 3.8 per cent to €13.06.
The doom and gloom in the aviation business plumbed fresh depths with Eads sliding steeply after Goldman Sachs downgraded the stock from "recommended list" to "market perform". The broker said demand trends in the global civil aircraft market faced "major and immediate risks in terms of order cancellations and deferrals".
Eads, already suffering from heavy research and development costs, ended the session off 6.8 per cent at €11.05.
The hard-hit carriers had a mixed session amid widespread speculation that Swissair was set to file for bankruptcy, news of cargo surcharges at KLM and nervousness at British Airways ahead of tomorrow's monthly traffic figures from the UK carrier. Air France added 1.7 per cent at €12.20, but KLM shed 0.6 per cent at €8.80 and Lufthansa, upgraded from "reduce" to "accumulate" by Commerzbank, 0.8 per cent at €10.32.
The technology sector gave ground after last week's gains.
Infineon remained volatile as oversupply worries continued to dent investor interest in the chipmaker whose cash position remains tight.
The shares, which jumped 10 per cent on Friday, took a 6.7 per cent dive to €12.60.
Nokia lost 7.8 per cent to €16.55 and Ericsson fell 6.2 per cent to SKr36.20.
