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News > International
Europe in tail spin
April 14, 2000: 12:27 p.m. ET

Major bourses down more than 3% on renewed U.S. inflation fears
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LONDON (CNNfn) - Europe's major bourses closed heavily lower Friday after a U.S. economic report that raised the specter of quickening inflation pushed Wall Street shares down sharply.
    The CAC 40 in Paris, heavily weighted with technology and media stocks, tumbled 3.2 percent to 6,065.73, off more than 4.1 percent on the week. Frankfurt's Xetra Dax fell 3.25 percent to 7,207.00, with index heavyweight Deutsche Telekom (FDTE) off 6.2 percent. The index fell more than 4 percent this week.
    graphicLondon's FTSE 100 index fell 2.8 percent to 6,178.1, with technology stocks leading the market lower. Europe's biggest stock exchange closed down 6 percent on the week, while the SMI in Zurich shed 1.2 percent to 7,494.4 but fell only 0.5 percent over the week.
    The FTSE Eurotop 300, an index of the largest stocks across Europe, shed 2.6 percent to 1,561.04, with the telecom, computer and technology sub-indexes each falling more than 4 percent
    That was after the U.S. government reported that consumer prices in February advanced at their fastest pace in nearly a year. The figures sparked concern that the world's largest economy may not be immune to inflation pressures, and may need higher interest rates to quell accelerating price rises.
    In midday trading on Wall Street, the technology-laden Nasdaq composite index fell 8.2 percent to 3,375.11, while the Dow Jones industrial average skidded 3.5 percent to 10,545.97.
    The latest declines have left leading European indexes well below their peaks for the year. Friday morning the FTSE 100 was about 9 percent down from its early-January high, while Frankfurt's Dax was about 8 percent off its more-recent record. But equity strategists at Morgan Stanley Dean Witter told CNNfn they see markets falling between 8 and 12 percent further before recovering by the fourth quarter.
    "This is a correction, not a bear market," said Richard Davidson, European equity strategist at Morgan Stanley, predicting that technology, media and telecommunication shares will underperform the wider European equity market by 15 percent, already having fallen an average of about 22 percent since peaking in March.
    
FTSE tech shares suffer

    Tech shares knocked the London market back sharply. Internet security company Baltimore Technology (BLM) slumped 25.8 percent, palmtop computer maker Psion (PSON) slumped 14 percent, and software consultant Logica (LOG) fell 7.7 percent, falling for a second day, and computer systems integrator Sema Group (SEM) dropped more than 6.4 percent. Britain's biggest internet service provider Freeserve (FRE) fell 7.4 percent.
    graphicIndex heavyweight Vodafone AirTouch (VOD) weighed in with a 7 percent loss, magazines and radio company EMAP (EMA) slid 10 percent, and Celltech (CCH), Britain's largest biotechnology company, fell more than 5 percent.
    But "old economy" stocks held on to most of their early gains. Britain's rail network operator Railtrack (RTK) rose 2.3 percent, while snacks and beverages producer Cadbury Schweppes (CBRY) rose 3.2 percent. The world's largest airport operator, BAA (BAA), gained 4.7 percent.
    Among the tech and media losers in France, information technology consultant Cap Gemini (FCAP) fell more than 9.1 percent, Europe's largest pay-TV company Canal Plus (PAN) dropped more than 8.7 percent and computer chip maker STMicroelectronics (PSTM) gave up 6.7 percent. France Telecom (PFTE), the country's largest phone company, dropped 6 percent.
    Vivendi (PEX) fell 4.9 percent. The Financial Times reported earlier Friday that the media and utility company, along with German media company Kirch Gruppe, is considering contributing assets to Rupert Murdoch's planned Platco digital television platform. Vivendi owns about 25 percent of Murdoch-controlled BSkyB (BSY), Europe's second-largest pay-TV broadcaster.
    In Germany, engineering and electronics conglomerate Siemens (FSIE) was down 5.8 percent, and electronic components maker Epcos (FEPC) fell 7.7 percent. Ski and sportswear maker Adidas Salomon (FADS), which was the leading gainer over the last two sessions, lost 4.5 percent.
    In the currency market, the euro weakened against the U.S. dollar to $0.9540 from $0.9564 in late New York trading Thursday, amid wariness ahead of a meeting of G7 ministers in Washington set for this weekend. Back to top
    -- from staff and wire reports

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.