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European markets routed
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March 22, 2001: 12:52 p.m. ET
London plunges 4.1%; Swiss cut rates to stop selloff after profit warning
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LONDON (CNN) - European stock markets were routed on Thursday, in a broad-based decline led by old economy stocks, after a series of profit warnings.
 London's key index plunged to its biggest one day percentage loss since October 1992, while the Swiss cut interest rates to stop a abrupt sell-off after Zurich Financial Services issued profit warning.
Sharp selling on Wall Street plunged European markets further into the red on concerns the U.S. economic slowdown could spread to the rest of the world.
There was still disappointment that U.S. interest rates were only cut by 0.5 percentage points.
"Stocks should continue to sag under the weight of the Fed's disappointing rate response on Tuesday and the European Central Bank's refusal to admit to the risks emanating from global economic weakness," economist at Bear Stearns wrote in a note to investors.
London's benchmark FTSE 100 index, Europe's biggest stocks market, dropped 4.1 percent, or 227.4 points, to close at 5,313.3, its lowest level in 29 months.
Zurich SMI plunged 5.6 percent on the back of Zurich Financial Services' profit warning. The Swiss National Bank surprised markets by cutting its key interest rate target by 0.25 percentage points, citing growing economic uncertainty amid sharp plunges in global equity markets and a reduced risk of inflation.
 Frankfurt's late trading Xetra Dax plunged 4 percent, or 230.19 points, to trade at 5,391.90. Europe's biggest automaker Volkswagen (FVOW) and communications-to-engineering conglomerate Siemens (FSIE) were among the biggest percentage losers.
In Paris, the blue-chip CAC 40 shed almost 4 percent, or 189.94 points, to a 17-month low of 4,824.82, led by consumer electronics maker Thomson Multimedia (PTMM) and insurer AXA (PAXA).
Amsterdam's AEX index fell 4.4 percent as electronics manufacturer Philips tumbled 5.9 percent. Milan's MIB30 lost 4.8 percent.
 The broader FTSE Eurotop 300 index, a basket of Europe's largest companies was 4.1 percent lower, with the insurance component down 7.2 percent and the electronics sub-index 6 percent lower.
In the currency market, the euro weakened against the dollar, buying 88.50 U.S. cents, compared with 89.65 cents in late New York trading a day earlier.
U.S. markets fell sharply in midday trade on Thursday. The tech-laden Nasdaq composite shed 1.4 percent to 1,803.87, while the blue-chip Dow Jones industrial average slid more than 3 percent, or 289.68 points, to hit 9,197.32.
UK controls maker Invensys (ISYS) dived 9.9 percent after saying that second-half operating profit before exceptional items would be marginally lower than the first half. The company also said it would cut 5,000 jobs by the end of the year.
Banking and financial stocks dropped sharply after Zurich Financial Services plunged more than 20 percent after reporting a disappointing fall in profit and saying there would be no growth in the current year.
Germany's Allianz (FALZ) dropped 5.3 percent and French insurance rival AXA (PCS) fell 9.4 percent to  111.30 after UBS Warburg reduced its target price to 125.00. AGF (PAGF), France's second-biggest insurer, slipped 3.5 percent.
UBS, Switzerland's biggest bank, dropped 7.3 percent and close rival Credit Suisse Group declined 4.8 percent. In Germany, Deutsche Bank (FDBK) slipped 4.6 percent, Dresdner Bank (DRB) dipped 4.1 percent and HypoVereinsbank shed 2.5 percent.
Among other old economy stocks racking up big dips, building materials firm Lafarge (PLG) fell 7 percent. German sporting goods maker adidas Salomon (FADS) slipped 2.2 percent.
Automaker Volkswagen (FVOW) skidded 8.5 percent, despite saying 2001 profit should rise this year.
Engineering and electronics maker Siemens (FSIE) fell 6 percent in Frankfurt, while its electronic component unit Epcos (FEPC) fell 3.6 almost 5 percent. French consumer electronics maker Thomson Multimedia (PTMM) dropped 9.3 percent.
London-listed South African network service provider Dimension Data (DDT) plunged 9.6 percent after investment bank UBS Warburg downgraded its earnings forecast for 2001 by 8 percent and for 2002 by 15 percent.
Technology stocks continued their downward slide. Nokia, the world's biggest handset manufacturer, fell 5.6 percent and Sweden's Ericsson dropped almost 3.4 percent.
Sonera, the Finnish telecom operator, fell 7 percent after the government, which owns 53 percent of the telecom company, fired almost the entire board because the stock had fallen more than 90 percent in the last year.
France Telecom (PFTE) fell 3.2 percent after posting slightly weaker-than-expected 2000 profit.
But it wasn't all doom and gloom for tech stocks. German chipmaker Infineon Technologies (FIFX) rose 4.1 percent after U.S. rival Micron Technology (MU: Research, Estimates) said it was experiencing a pick up in personal computer chip demand. And Paris-listed rival STMicroelectronics (PSTM) nosed up 0.6 percent and ASM Lithography, which makes equipment to manufacturer chips, rose 1 percent. 
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