Alcatel crashed to a fresh low for the year as investors turned increasingly nervous ahead of today's second-quarter results statement from the telecommunications equipment leader. Concern about shrinking demand and operating margins have been building at Alcatel all year, driving the shares down from January's peaks of #72.35 . Yesterday they finished a volatile session off a further 4.4 per cent at #16.91.

Topped by grim trading updates from Nortel Networks and Lucent Technologies, the bad news from the sector has been relentless as the global slowdown forces customers to rethink capital spending programmes. Analysts complain that earnings visibility at Alcatel, seldom good, has been decreasing. Leading operators had an equally bleak day. France Telecom, which reports first-half sales figures today, shed 1.8 per cent to #47.15. Deutsche Telekom fell 2.8 per cent to #23.72 and Telefonica 2.6 per cent to #13.17. KPN lost 2.4 per cent at #4.79.

In the technology sector, Siemens picked up 1.4 per cent to #57.35 after the electronics leader posted a heavy underlying loss for the third quarter, held back by restructuring charges at its telecoms businesses. IT and management consultancy Cap Gemini was marked 2.8 per cent lower to #69.50 ahead of its first-half earnings report next Monday. Consumer electronics group Thomson Multi-media gave ground as the market was unsettled by news of a 45 per cent drop in profits at its US peer, Radio Shack. Thomson shares lost 2.3 per cent to #34.75.