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Telecoms rattle bourses
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September 21, 2000: 1:21 p.m. ET
Profit fears hit Europe after Sprint warning; financials hold up FTSE, Dax
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LONDON (CNNfn) - A second straight day of retreat in the telecom sector dragged Europe's leading markets to a lower close Thursday while gains for financial stocks limited the losses in London and Frankfurt.
The FTSE 100 index in London, the benchmark for Europe's largest stock market, fell 80.7 points, or 1.3 percent, to close at 6,199.2, with cable and telecom firm Telewest Communications (TWT) sinking 11 percent.
In Paris, the CAC 40 slipped 2.4 percent to 6,251.57, its lowest close since late May. Heavyweight Alcatel (PCGE), a network equipment maker, dropped 6.7 percent. 
Frankfurt's Xetra Dax fell 83.31, fell 1.22 percent, to 6,682.92, hitting an eight-month low amid declines in the hospitality and technology sectors. Airline Lufthansa (FLHA) fell 9.2 percent as traders said it provided too little detail on its acquisition of a one-quarter stake in airline Eurowings.
The AEX in Amsterdam and Italy's MIB 30 each fell 1.3 percent. The SMI in Zurich, which has less exposure to telecom and technology stocks, nosed up 0.4 percent.
The broader FTSE Eurotop 300 index, a basket of Europe's largest companies, fell 1.5 percent to 1,591.23, with its information technology hardware sub-index down 4.9 percent and the telecom segment slipping 3.2 percent.
 click here for the biggest movers on the ftse 100 in London
 click here for the biggest movers on the dax 30 in Frankfurt
 click here for the biggest movers on the cac 40 in Paris
As the bourses closed, Wall Street was mixed. The Dow Jones industrial average rose 13.69 points, or 0.1 percent, to 10,701.61, while the tech-rich Nasdaq composite index fell 1.7 percent.
In the currency market, the euro strengthened against the dollar to 85.77 U.S. cents from 84.89 cents in late New York trading Wednesday.
Telecoms take a tumble
Investors' jitters about telecom operators dragged most of Europe's leading players deep into the red. British Telecommunications (BT-A) shed 5.4 percent, rival Cable & Wireless (CW-) fell 4.7 percent and network operator Energis (EGS) slipped 5.7 percent. 
Vodafone (VOD), the cell-phone service provider and Europe's most valuable company, fell 3 percent in London, making it responsible for nearly one-quarter of the drop in the FTSE index.
In Paris, Dutch-based network company Equant (PEQU) declined 3.1 percent, and German telecom titan Deutsche Telekom (FDTE) fell 2.8 percent in Frankfurt. DT's online unit T-Online International (ATOI) fell 5.3 percent after the second departure of a high-level executive in a month.
In Helsinki, cell phone maker Nokia slipped 4.8 percent and mobile operator Sonera fell 8.6 percent. They were two of the driving forces that led the HEX General, Finland's leading index, to fall 4.2 percent. Nokia rival Ericsson fell 6.4 percent in Stockholm.
The gloom struck the telecom sector after U.S.-based long-distance company Sprint warned Wednesday it will miss analysts' third-quarter earnings forecasts and said its wireless customer base will not grow as fast as it projected earlier. Sprint shares fell 5 percent Wednesday.
"Techs and telecom firms are under a lot of pressure," said Richard Kersley, an equity market analyst with CS First Boston. "The sentiment following the Sprint figures hardly helped, plus there are a lot of IPOs and secondary issues on the calendar and that has had a depressing effect."
"On the whole, the common thread is suspicion about profits," Kersley said. Although he said the sell-off in tech shares might be overdone, for now he's recommending defensive plays such as financial service and food companies.
Financials jolted higher
The banking and insurance sector was just where many investors turned in London.
Bank of Scotland (BOS) jumped 6.8 percent, while mortgage bank Halifax (HFX) rose 5.2 percent and among top insurers, Allied Zurich (ADZ) rose 2.4 percent and Royal Sun Alliance (RSA) added 2.8 percent.
In Paris, Assurances Générales de France (PAGF) climbed 0.2 percent after reporting a 45 percent surge in first-half net income to  672 million ($573 million). Rival Axa (PCS), the world's largest insurer by revenue, fell 5.5 percent after posting a smaller-than-expected 3.3 percent rise in first-half profit to 1.2 billion ($1 billion). 
Shares in Franco-Belgian bank Dexia (PDX) soared 5.3 percent in Paris. Traders cited speculation France's Société Générale (PGLE) was interested in buying the company. SocGen dropped 2.9 percent.
In Frankfurt banking circles, Commerzbank (FCBK) rose 1.9 percent and HypoVereinsbank (FHVM) rose 0.4 percent.
Elsewhere, U.K. industrial controls and software company Invensys (ISYS) fell 6.6 percent after a report in the Wall Street Journal said the company expects Dutch software firm Baan to break even by the middle of next year. The British company bought Baan for $800 million last month.
Among leading techs in Frankfurt, chipmaker Infineon Technologies (FIFX) shed 2.7 percent and engineering and technology powerhouse Siemens shed 4.5 percent.
Automaker BMW (FBMW) added 2.1 percent.
Drug stocks fared well in London. Glaxo Wellcome (GLXO) rose 2 percent and merger partner SmithKline Beecham (SB-) climbed 1.5 percent. Anglo-Swedish rival AstraZeneca (AZN) added 2.6 percent in London.
German drug maker Schering rose 2.3 percent in Frankfurt, while Aventis (PAVE) added 1.8 percent in Paris. 
-- from staff and wire reports
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