LONDON (CNNfn) - European equity markets ended lower Thursday as investors sent shares of leading retailers back to the store. London stocks dipped for the third straight session, pressured by declines in oil and drug issues, while Paris and Zurich posted slim losses. Frankfurt suffered the worst setback of the big four, receding 1.3 percent amid erosion in technology and auto stocks.
An early upturn on Wall Street, where the Dow Jones industrial average was up around 45 points, or 0.4 percent, when the London market closed, provided some upward impetus. The Nasdaq also had resumed its upward march, climbing 49 points, or around 1 percent, a day after posting its fifth- biggest one-day point gain in history.
The benchmark FTSE 100 in London closed down 15 points, or 0.2 percent, at 6,594.6, recovering from a midday decline of more than 70 points, helped by a late-day return to the plus column by index heavyweight Vodafone AirTouch (VOD), which had pressured the blue-chip index. Vodafone's recovery was not enough, however, to offset heavy losses in leading drug, oil and retail stocks.
In Paris, the CAC 40 ended down 10.98 points at 6,268.31, a dip of 0.2 percent, with sharp gains in France Telecom helping to limit losses. The electronically traded Xetra Dax in Frankfurt lost 1.3 percent, or 103.84 points, to end at 7,694.78, while the SMI in Zurich shed 0.4 percent to 7,360.2 and the Aex exchange in Amsterdam retreated 1.1 percent to 671.89.
Sweden's OMX index slumped 1.9 percent to close at 1,467.11, hit by a freefall in shares of fashion retailer Hennes & Mauritz. The company's shares tumbled about 30 percent after its chief executive resigned as first-quarter profit fell 12 percent amid losses from currency fluctuations and asset writedowns.
In Britain, shares of Main Street clothes retailer Next (NXT) slumped 12.5 percent even though a 20 percent jump in pretax profit for the year to Jan. 31 matched analysts' expectations. Observers said the company's report of 3 percent growth in sales for the first few weeks of the new fiscal year came as a disappointment.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, fell just under half a percent to 1,626.35. The general retailers sub-index led the decliners, falling almost 8 percent, followed by lesser losses in steel, mining, computer and oil and gas components.
In currency markets, the dollar hit a two-week high against the yen. By late Thursday, the dollar was quoted at 107.45 yen, off its earlier high of 107.77 yen. The U.S. currency eased against the euro amid bullish comments from the vice president of the European central bank about the single currency. ECB Vice President Christian Noyer also said the bank could intervene at any time to support the currency. The euro was trading at $0.9699 in London late Thursday.
Drug stocks bedridden
Heavyweight oil producer BP Amoco (BPA) dropped 3.1 percent in London and rival Shell Transport & Trading (SHEL) fell 1.5 percent after crude prices eased on news that the U.S. had passed a bill confirming President Clinton's power to cut off aid and arms sales to OPEC members and other countries that fix oil prices, to protest the past year's increase in the cost of oil. By contrast, Vodafone AirTouch (VOD), the world's biggest mobile-phone operator, reversed early losses to end up 0.6 percent a day after a £3.2-billion sale of stock in the company.
Drug stocks felt faint. SmithKline Beecham (SB-) fell more than 2.5 percent, while sector rival Glaxo Wellcome (GLXO), which announced earlier this year it plans to merge with SmithKline, slipped 3.2 percent. The two companies collectively lopped about 13 points off the blue-chip advance. AstraZeneca (AZN), the U.K.'s biggest drug maker, bucked the downturn, edging up 0.4 percent.
Technology-related stocks performed better. Recent FTSE 100 entrant, biotech company Celltech Group raced up 9.1 percent, and telecom firm Thus (THUS) advanced 3.8 percent. Cable operator Telewest (TWT) soared 9.3 percent after it said 110,000 customers had selected its digital television service, launched in October. The company reported its pretax loss widened to £529.9 million in 1999, in line with analysts' forecasts.
In Paris, Aventis (PAVE), Europe's leading pharmaceutical firm, shed 4.6 percent even after it unveiled a 24 percent increase in pro forma profit for 1999, while Novartis lost 0.8 percent in Zurich.
Investors check out of hotel firm
Hotel company Accor (PAC), the owner of Sofitel and Motel 6 lodging chains, fell 5.3 percent to  37.60 after investment bank Goldman Sachs downgraded its rating on the stock to "market performer," taking it off its list of recommended shares and lowering its share price target by 10 to 44. Also exerting downward pressure, building materials company Lafarge (PLG) fell 3.2 percent. On the broader market, consumer products maker Thomson Multimedia (PTMM) slid 8.3 percent.
Shares in France Telecom (PFTE) shot up 2.8 percent, however, after the company bought a 28.5 percent stake in German phone company MobilCom for 3.74 billion, securing a foothold in the German mobile-multimedia market. MobilCom (FMOB) shares tumbled 22 percent on Frankfurt's Neuer Markt, which slid 4.5 percent to end at its lowest level since Feb. 23.
In Germany, HypoVereinsbank (FHVM) rose 3.8 percent after the mortgage bank said it planned to increase its investment in Internet ventures to 250 million in 2000. But automaker BMW (FBMW) tumbled 3.1 percent as the company said it is open to other offers for its U.K. Rover subsidiary, which it agreed to sell last week to a private equity company, Alchemy. Accounting software maker SAP [FSE:FSAP3] lost 4.8 percent. 
-- from staff and wire reports
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