Vivendi Universal, Europe's biggest quoted media company, fell 1.8 per cent to €49 in spite of saying it was sticking to its profit forecast for the year following the release of first half results.

The shares had been down 4 per cent in the morning as EMI gave a sales warning and AOL Time Warner overnight warned about missing revenue forecasts because of the US attacks.

Vivendi posted a 42 per cent rise in first-half core earnings (before interest, tax, depreciation and amortisation) and confirmed its target of boosting those earnings by 35 per cent this year.

It also said it was raising €4.2 billion from monetising its 23 per cent stake in BSkyB handing the shares to Deutsche Bank with an option to retrieve them by 2005. Vivendi retains the exposure to any fall in the value of the shares.

The deal is in response to EU demands for divestments following Vivendi's merger with Seagram. Vivendi said it would spend the money on debt reduction and share buy-backs.

Preussag, Europe's biggest travel company, rose €3.69 or almost 17 per cent to €25.70. The sector got a lift on Monday when Thomas Cook, Europe's number two, said it was sticking to its full year earnings target. But one analyst described the rises as a "dead cat bounce".

Chipmaker STMicroelectronics rose almost 5 per cent to €23.45 and chip equipment maker ASML rose 10.7 per cent to €13.62, adding to their gains of Monday. But Infineon fell 2.7 per cent to €13.13, a new record low, as the market continued to worry about falling prices of computer memory chips.

Infineon said yesterday it had not yet had to use its credit lines of €1.3 billion-€1.4 billion. But WestLB Panmure cut its forecast on the stock, saying: "D-Ram prices have to more than double over the coming month in order to avoid a cash problem for Infineon."

ABN Amro cut its forecasts for chipmakers' globally.