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Europe reels as techs sink
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March 30, 2000: 12:16 p.m. ET
Big 3 markets fall 2% or more as telecoms, media lose investor favor
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LONDON (CNNfn) - European markets closed sharply lower Thursday, with top technology, media and telecommunications issues taking their cues from a Nasdaq sell-off a day earlier. Old-school oil, automotive and consumer goods companies were among the few strong performers.
Paris's CAC 40 retreated from a strong early week, sinking 3 percent to 6,313.82 while the electronically traded Xetra Dax in Frankfurt dropped 2.8 percent to 7,664.89. Drubbings for an array of technology companies dragged London's FTSE 100 down 2.3 percent to 6,445.2. Zurich's SMI, which is dominated by financial-services and drug shares, slipped 0.3 percent.
Energy, tobacco and forest products companies were among the few solid performers in Europe's major markets, while real estate, media and banking stocks all joined telecommunications and technology stocks on the down side.
"The European markets are biased toward the technology, media and telecom sector - and that's the Nasdaq," said Jerry Lucas, stock strategist with Enskilda Securities, referring to the technology-heavy index's 3.9 percent plunge Wednesday. "But in the last half hour, we've moderated our losses because the Nasdaq opened higher [Thursday]."
Investors also appeared to shrug off woes of U.S.-based hedge fund Tiger Management, which sources said Wednesday will liquidate its Jaguar fund due to poor market performance. Some experts suggested the Tiger troubles could spark a market sell-off much like the woes at hedge fund Long-Term Capital Management did in 1998 - but that proved unfounded.
"I don't believe that had any impact at all," Lucas said. "Tiger was famously 'anti' the technology, media and telecom sectors -- and the [tech] sector was marked down today, while the traditional sectors were marked up."
In the currency market, the euro revived against the dollar to 96.05 cents, up from 95.19 cents in New York Wednesday, after the European Central Bank, as expected, held interest rates unchanged at 3.5 percent.
Media, techs take a beating in Paris
Highlighting the tremors in the recently high-flying media sector, the French pay-TV operator Canal Plus (PCAN) fell 12.6 percent, among the leading decliners in the CAC. Trading in the stock was briefly halted after it fell limit-down.
Top loser in the benchmark Paris index was media-defense conglomerate Lagardère (PMMB), tumbling 13.4 percent after shining early in the week. Chipmaker STMicroelectronics (PSTM) sank 8.2 percent and . index heavyweight France Telecom (PFTE) lost 7.8 percent.
In Paris, it was "old economy" shares such as oil producers and retailers that showed resilience. Oil producer TotalFina (PFP) gained 4 percent and supermarket chain Casino (PCO) rose 1.7 percent.
In the deal-making buzz was French automaker Renault (RNO), rising 4.7 percent and topping the list of CAC leaders on reports that Swedish truck maker AB Volvo is in talks to buy Renault's truck unit RVI. Volvo shares shed 2 percent.
Banks, techs fall in Frankfurt
In Frankfurt, SAP [FSE:FSAP3] tumbled 8.8 percent after American depositary receipts of Europe's largest software publisher posted a double-digit percentage decline in New York trading Wednesday.
Deutsche Telekom (FDTE) weighed heavily on the market with a 6.9 percent decline. Among other technology plays, Siemens (FSIE) fell 3.7 percent and its separately traded subsidiary Epcos (FEPC), a maker of electronic components, tumbled 9.1 percent.
The German banking sector was hit hard for a second day. Deutsche Bank (FDBK) fell 2 percent and merger partner Dresdner Bank (FDRB) lost 2.7 percent, while rival Commerzbank (FCBK) shed 5.4 percent.
Psion reels in London
In London, the technology and telecom sectors were among the leading decliners on the FTSE 100 index. Handheld-computer maker Psion sank 15.7 percent, dragged down in part by remarks from U.S.-based rival Palm (PALM: Research, Estimates), which predicted rising costs and operating losses.
Elsewhere in the tech sector, Internet security firm Baltimore Technologies (BLM) shed 8.8 percent and chip designer ARM Holdings (ARM) fell 8.9 percent.
Dragging particularly on the FTSE was Vodafone AirTouch (VOD), Britain's most-valued company, which tumbled 2.4 percent amid the telecom sector slide. The mobile phone company said it and two partners will gear up for a new round of cell-phone licensing in Japan, launching a $6.6 billion stock offer through a Japanese affiliate to improve its mobile technology.
Computer services provider Logica (LOG) also lost 10 percent and Scottish telecom operator and FTSE 100 newcomer Thus fell 10.1 percent.
Also on the uptick, BP Amoco (BPA) rose 4.1 percent and food products maker Diageo (DGE) added 4.1 percent after its Pillsbury division in the United States announced a round of job cuts to reduce costs.
Financial-service stocks in London also strengthened at the techs' expense. Royal Bank of Scotland (RBS) rose 3.5 percent after agreeing to sell its Gartmore fund management arm to U.S. insurer Nationwide Financial (NFS: Research, Estimates) for about $1.6 billion.
Railtrack (RTK), the operator of the U.K.'s railroad infrastructure, rose 7.6 percent after outlining its medium-term investment plans. The company, which had seen investor support sapped by misfortunes ranging from train wrecks to criticism from its industry regulator, was the biggest gainer on the benchmark index. 
-- from staff and wire reports
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