Investors slammed Renault into reverse after the motor leader wheeled out below par third-quarter sales and issued a profits warning. Sentiment was also shaken by the news that any stake Japan's Nissan might take in the French company was likely to be in newly- issued equity - and therefore effectively dilutive for existing shareholders.
Renault shares, a strong market recently, fell heavily as slack demand and a smaller-than-expected contribution from the 37 per cent owned Nissan prompted a warning for the group that second half profits would fall short of the first. The shares finished down 6.5 per cent at 35.82 after a session low of €34.68.
Elsewhere in the sector, DaimlerChrysler and Volkswagen gave up 2.9 per cent at €40.33 and 3.6 per cent at €42.19 respectively.
Not for the first time in recent months, the financial sectors were forced to take rate cut disappointments on the chin. With the European Central Bank again sitting on its hands, tentative market hopes for easier money turned to dust and bank and insurance leaders fell.
There was a lot of profit-taking in telecommunications, such as at Sonera, the Finnish operator. Having soared more than 50 per cent in the first three days of the week after Monday's slightly better than expected profits, it fell back 12 per cent to €5.40.
France Telecom and its mobile arm Orange, which both rose this week, fell back as they issued quarterly results.
The weakness in TMTs extended far and wide. 1TF, the main French commercial TV group, fell 4.6 per cent to €26.80, and chipmaker Infineon was down 4.6 per cent to €17.39.
In chemicals, the weakest stock was Germany's Bayer, which fell 7 per cent to €33.10 after consumer groups in the US increased pressure for cheap supplies of its anti-anthrax drug Cipro.
