Technology and telecom shares ended a bad week with more falls as the knock-on effects of the downturn continued.
Nokia, the world's leading mobile phone maker, plunged to fresh 15-month lows following pessimistic comments about the handset market from Philips and Siemens.
Further pressure came when UBS Warburg removed Nokia from its top 10 global technology picks. The shares closed 9.4 per cent lower at #30.30.
Late last year Nokia's share price was highly resilient compared with its peers but the technology shake-out has finally caught up with it. In the last three weeks it has lost almost 30 per cent. Nokia had a tradition of exceeding analysts' expectations. Stuart Jeffrey, technology analyst at HSBC, said that in the past "everything Nokia said was assumed to be conservative". The spell was broken late last month when the company said first quarter earnings would show no growth. Swedish rival Ericsson fell 8 per cent to SKr94, while Philips was off 3.1 per cent to #36.43 and Siemens lost 3.2 per cent to #143.15. Alcatel fell 4.8 per cent to #55.15 in heavy volume of 14 million shares traded.
France Telecom, which brings its mobile arm Orange to market on Tuesday, lost another 1.25 per cent to a new 16-month low of #83.10. The ratings agency Fitch downgraded France Telecom from "stable" to "negative" amid concerns about how it would tackle its #60 billion debt.
Deutsche Telekom fell 4.5 per cent to #31.75 after news it was sweetening the terms of its acquisition of VoiceStream for US shareholders.
Italian internet company Tiscali fell 5.3 per cent to #18.66 after the sudden resignation of James Kinsella, the chief executive who joined after the acquisition of World Online. Seat Pagine Gialle, the publisher and ISP, fell after a downgrade from UBS Warburg. The shares fell 4 per cent at #1.84.
