Motor stocks fell heavily as Ford Motor slammed the brakes on sector sentiment with a profits warning and planned job cuts.

With its highly visible stake in the North American car market, DaimlerChrysler led the downturn, sliding 7.3 per cent to €47.33 in 8 million shares traded. BMW lost 3.2 per cent to €34.98 and Porsche 3.8 per cent to €368.50. But Volkswagen was harder hit, shedding 4.9 per cent at €49.33. Renault was off 1.5 per cent at €49.83 and Fiat 1.9 per cent at €25.54.

Foods group Numico was a rare firm feature, surging 8.2 per cent to €44.49 following a better-than-expected earnings release. But the performance did little to lift the mood in the sector. Danone shed 0.8 per cent at €142.90 and Nestle, which publishes six-month figures next week, slipped 0.6 per cent to SFr358.

News of falling profits at Australia's Qantas, courtesy of high fuel costs, mounting competition and slowing demand, hit airline stocks. Lufthansa, which reports six-month figures next week, fell 3.6 per cent to €17.40. Air France came off 1.3 per cent at €18.70 and KLM 2.9 per cent at €16.75.

Technology companies suffered following poor earnings reports from Hewlett-Packard and Dell and further weakness on the Nasdaq. Siemens fell 4 per cent, Infineon shed 6 per cent and Nokia was down more than 6 per cent to a new two-year low of 18.75.

Ericsson shares continued to languish, closing 2.9 per cent down at SKr51, while Philips lost 4 per cent to 28.25. Ericsson has lost 20 per cent since early July and Philips 12 per cent.

Telecoms fell a further 2.3 per cent. Deutsche Telekom lost a further 3.7 per cent to €17.33.

Swedish telecom Telia fell 4.8 per cent to SKr46. Sonera, which is in merger talks with Telia, fell 3 per cent to 5.85.