European Closing Update: U.S. Markets, Election Weigh on Europe

LONDON -- European markets fell as technology stocks suffered from the Nasdaq's slide overnight and Wall Street's weaker open.

The FTSE 100 closed down 35 points, or 0.5%, at 6442, and the more volatile Techmark 100 closed down 90 points, or 2.6%, at 3347.

Tech stocks in general were massively out of favor. Optical-component maker Bookham Technology (BKHM) plunged to a session low of 17.96 ($25.50), a 26.7% fall, before recovering slightly to end down 14.6% at 18.26, making it the FTSE 100's biggest faller. Some of this can be attributed to the fact that Cisco (CSCO) warned of a growing stockpile of fiber-optic components, the rest to wider third-quarter losses it reported Wednesday.

E-security software maker Baltimore Technologies (BALT), which pleased the market with its third-quarter results Wednesday, got hammered as it fell 7.4% to 485p.

British Telecom (BTY) was always going to be close to the center of attention as it released third-quarter results and details of its long-awaited breakup plans. BT said that up to 25% of Yell, the directories business that includes Yellow Pages, will be floated before the end of March 2001. In a more significant move, up to 25% of BT Wireless will be floated next year. And by the end of 2001, BT will have developed its data business called Ignite to a degree where it "could be listed." These moves are designed to help the firm cut its debt from 30 billion to 20 billion.

BT rose to a session high of 807.5p in a knee-jerk reaction but then got soundly whipped. Traders talked about too little, too late and the fact that the company didn't really unveil anything new. The shares slumped to a low of 735p, before closing at 749, a fall of 39p or 5.0%.

Overall it was a day of little cheer, but EMI managed to buck the trend. Schroder Salomon Smith Barney apparently placed a huge block of 8.5 million shares, but instead of weighing on the stock, EMI surged. Traders said this suggests that investors are hungry to get on board before an anticipated bid approach, with German media giant Bertelsmann seen as the most likely suitor. The shares closed up 32p, or 6.3%, at 544.

Europe's other stock markets also ended Thursday lower, despite another round of intervention in the forex markets by the European Central Bank to prop up the ailing euro. The CAC-40 in Paris closed down 64.9 points, or 1%, at 6271.2, and the Xetra Dax in Frankfurt was off 6.7 points, or 0.1%, at 7001.9 late in German trading. The Neuer Markt's tech-heavy Nemax 50 index was down 196.7, or 4.4%, at 4234.2.

Amid BT's announcement it will restructure, other big European telcos trended lower. France Telecom (FTE) closed down 2.10 euros, or 1.8%, at 113.30 ($96.93), Deutsche Telekom (DT) fell 1.14 euros, or 2.8%, to 40.50 euros, and Telefonica (TEF) dropped 5.07 euros, or 1.2%, to 21.55.

Technology shares also came under pressure, as SAP (SAP) fell 8.95 euros, or 3.8%, to 227.05 and STMicroelectronics (STM) closed down 3.50 euros, or 6.3%, to 52.00.

Old Economy stocks were some of the few in the plus column Thursday, with German utility E.ON (EON) up 0.18 euros, or 0.3%, at 64.08 and DaimlerChrysler (DCX) 1.25 euros higher, or 2.31%, at 55.35.

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