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Europe flees 'new economy'
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March 15, 2000: 12:36 p.m. ET
Traditional industries benefit as investors switch from techs, media firms
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LONDON (CNNfn) - Investors shunned the "new economy" in Europe Wednesday, battering technology and media stocks and switching to traditional industries, as the major markets suffered heavy losses.
In London, the FTSE 100 slid 0.6 percent to 6,447.0, while Frankfurt's Xetra Dax took a severe pummeling in its third losing session this week and fell 3 percent, or 235 points, to 7,414.46.
France's CAC 40 fell 2.5 percent, or 161 points, to 6,188.94 as investors fought to exit the sectors that drove the market higher in previous weeks. Only Switzerland's SMI escaped the selling, climbing 18 points to 6,856.3. The Zurich exchange has far smaller exposure to Wednesday's under-pressure sectors.
Food, tobacco and consumer stocks were the main beneficiaries of the radical reversal in investment priorities, as shareholders began a hunt for value in previously unfashionable sectors of the market.
In London, Sema (SEM) sank 13 percent after announcing a $4.7 billion acquisition in the U.S. Analysts questioned the hefty premium paid by the software services firm.
Others techs in the firing line included telecom operator Kingston Communications (KCOM), down 16 percent, while there was an 11 percent fall for chip designer ARM Holdings (ARM) and a similar slide for software provider Sage (SGE). Media conglomerate Pearson (PSON), owner of the Financial Times, slumped 11 percent.
Companies that have been overlooked so far this year enjoyed an unlikely day in the spotlight. Associated British Foods (ABF), Britain's largest sugar refiner, jumped 17 percent, and British American Tobacco (BATS) bounced from an eight-year low Tuesday to gain 13 percent. Consumer stocks also moved higher, with hotel operator Hilton Group (HG-) up 9 percent.
Outside the blue-chip index the correction supplied a swift lesson to the young entrepreneurs behind online travel and entertainment shop Lastminute.com (LMC). The company floated Tuesday in Britain's most closely watched Internet IPO this year. The 28 percent surge in the stock price Tuesday was followed by a 15 percent slide Wednesday.
Amid widespread selling of technology shares in Frankfurt, Siemens (FSIE) tumbled 9 percent, unwinding some of its spectacular gains over the past year, and heavily weighted Deutsche Telekom (FDTE) posted a 6 percent decline. SAP (FSAP), Europe's largest software company, sank more than 7 percent.
Industrial issues fared better, led by an auto blue chip. BMW (FBMW) stormed up 10 percent on hopes that it may close or sell most of its British arm, Rover, when it holds a press conference Friday. The money-losing subsidiary has been a disaster since BMW bought it in 1994. Other leaders in Frankfurt included merging utility conglomerates Veba (FVEB) and Viag (FVIA), Europe's largest retailer, Metro (FMEO), and steel maker Thyssen Krupp (THY).
In Paris, the major tech firms were sharply lower, led by cable-TV operator Canal Plus's (PAN) 10 percent decline and conglomerate Lagardère's (PMMB) similar collapse. The CAC 40's big tech firms have enjoyed excellent runs in the past month or so, but chipmaker STMicroelectronics (PSTM) and data network operator Equant (PEQU) fell 8 percent. Defense electronics firm Thomson-CSF (PHO) fell 7 percent despite announcing better than expected full-year earnings.
Catering firm Sodexho Alliance (PSW) rocketed 9 percent higher, chased upward by the likes of Michelin (PML), L'Oréal (POR), hotel operator Accor (PAC) and electrical engineer Schneider (PSU) 
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