European Closing Update: Investors Missing In Action

LONDON -- European markets were missing that essential ingredient on Wednesday -- investors.

The indifference ahead of the Federal Reserve's interest rate decision ensured that the FTSE 100 spent a largely meaningless session drifting to end down 61.8 points, or 1.0%, at 6,313.5, while the Techmark closed down 13.9 points, or 0.4%, at 3,400.1.

The telecom sector accounted for much of the overall decline in the Footsie. Index heavyweight Vodafone AirTouch (VOD) retreated 11.5p, or 3.9%, to 286 ($4.32), accounting for half the index's fall, while Energis (ENGSY) shed 49p, or 1.8%, to 26.26 and Colt Telecom (COLTY) fell 71p, or 3.0%, to 22.90.

Logica was the main drag on tech stocks, as several analyst downgrades swiped 100p, or 6.0%, off the stock for a close of 15.70.

Biotech and drug stocks, however, had another good session, as the potential -- though it must be said still largely far-off -- medical benefits from the mapping of the human genome continues to excite investors. Oxford Glycosciences gained 122p, or 6.6%, to 19.85, Glaxo Wellcome (GLX) rose 34p, or 1.8%, to 19.12 and SmithKline Beecham (SBH)advanced 14p, or 1.6%, to 868.

Despite the market's fragile nature, newcomer Orchestream finished at 313.5p against an offer price to institutions of 185p. Volume was a healthy 28 million shares. Orchestream's technology should allow users to prioritize the order in which voice, video, data or text is sent out, and the best news from investors' point of view is that Cisco (CSCO) has given an implicit endorsement to the company. The big buyers of the technology will mainly be telecom companies, but end-users should also be interested. For example, Toys R Us (TOY) has taken the system on trial.

Europe's other major stock markets were mixed. The CAC 40 in Paris ended up 39.9, or 0.6%, at 6,607.9. Late in the German trading day, the Xetra Dax in Frankfurt was near unchanged at 7,050.3 and the Neuer Markt's tech-heavy Nemax 50 index was down 24.7, or 0.4%, at 6,126.5.

Big German tech shares were all in negative territory toward the end of the session, with Siemens (SMWAY) down 2.83 euros, or 1.8%, at 155.82 ($147.37), Infineon (IFX) 4.98 euro lower, or 5.4%, at 87.52 and SAP (SAP) off 3.80 euros, or 1.8%, at 210.40.

In Paris, conglomerate Vivendi (VVDIY) closed down 0.10 euro, or 0.1%, at 92.95 and food concern Danone (DA) ended up 3.00 euros, or 2.2%, at 139.40.

Major European telcos were able to finish on a positive note, with Telefonica (TEF) closing up 0.75 euros, or 3.5%, at 22.25 on the day of a board meeting where the CEO is likely to face a grilling over recent behavior (please link to story http://www.thestreet.com/int/euromarkets/979859.html ). France Telecom (FTE) ended up 1.00 euro, or 0.6%, at 158.90 and Deutsche Telekom (DT) was just 0.03 euros higher at 63.53.

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