The telecoms, media and technology sectors shouldered a heavy burden on another depressing day for European markets.

Philips, the Dutch consumer goods group, tumbled 6.2 per cent to €€2.10, while chip equipment group ASM fell 1.8 per cent to €20.77, as the mood was soured by Cisco's overnight fall after a Merrill Lynch analyst raised concerns about its reserves.

The sector was also bruised by comments by the chairman of German chipmaker Infineon, which said prices for memory chips could fall in the next two to three months if the market did not recover significantly. Infineon fell 3.6 per cent to €17.48.

Alcatel was another big loser, falling 6.2 per cent to €12.12. Ericsson dropped 5.7 per cent to 21.40 Swedish krona, as 10,000 employees of the telecoms equipment-maker stayed at home because a power failure left company offices and factories in northern Stockholm without electricity.

Nokia remained under pressure, closing 4.4 per cent down at €14.30, its lowest since February 1999. The decline came in spite of a forecast that its sales and market share would pick up next year, driven by growing Chinese demand and new product sales.

Vivendi Universal came under the cosh as a board meeting at the media giant failed to deliver news on its strategy to restore confidence in the shares that have tumbled almost 50 per cent since the start of the year. The creation of what Vivendi called a governance committee, which was regarded as a half-measure, also failed to reassure the market.

Analysts said the board should have either left CEO Jean-Marie Messier to get on with his job, or it should have dismissed him. Vivendi shares fell 5.1 per cent to €32.02.

Deutsche Telekom hit an all-time low, falling to €11.57 on lingering disappointment that its shareholders meeting earlier in the week failed to provide more positive news.