More grim earnings news drove markets lower and once again it was technology stocks that bore the brunt of the selling as heavy losses and job cuts at Canada's Nortel Networks flattened sentiment right across the TMT sectors. The Nortel statement fanned flames ignited earlier in the week by Nokia, the Finnish mobile handset company which warned of slowing earnings. And in heavy trading volumes, falls of more than 4 per cent were common.

Loss-making cable network operator UPC plunged another 11.5 per cent. One big seller was said to be offloading huge amounts of the shares, amid widespread concern that there could be disappointing news to come. The shares, which lost 13 per cent on Thursday, were marked 24 per cent lower in intra-day trade. By the close, they were trading at €3.69. Even after the partial recovery, the shares were the biggest loser within the FTSE Eurotop 300 index.

Philips Electronics was another notable loser, as the group joined the lengthening list of companies to have issued profits warnings. Philips, Europe's third largest manufacturer of semiconductors, dropped 4.4 per cent to €28.24 as it warned that second-quarter sales would fall 20 to 25 per cent from the first quarter as a result of reducing stocks and increasing price erosion.

France's ST Microelectronics, which on Thursday cut its second quarter sales forecast, lost 3.2 per cent to €37.30 as Deutsche Bank cut its earnings forecasts by 18 per cent for the current year and by 11 per cent for 2002.

Telecoms equipment group Alcatel fell 4.5 per cent to €25.79 with 15.5 million shares traded. Some leading operators were equally pressed. KPN, suffering from financing concerns, lost 4.1 per cent at €6.52 and Telefonica 3.2 per cent at €16.55. Nokia ended little changed and Ericsson, which stood at SKr122 in January, managed to ride out the downturn, helped by confirmation that it stood by earlier forecasts. It added 4.7 per cent at SKr55.