European Closing Update: Tech Selloff Gathers Pace

LONDON -- A bleak day for European equities.

The markets got off to a bad start following the fall of the Nasdaq Composite Index on Friday, and with the market falling below 3000 points after Hewlett-Packard's (HWP) disastrous results, the selloff gathered pace.

In London, the Techmark 100 stood 143 points lower, or 4.5%, at 3079 and the FTSE 100 slumped 125 points, or 2.0%, to 6275.

Telecom-related stocks were especially hard hit. Optical component maker Bookham Technology (BKHM) was the FTSE 100's biggest loser, shedding another 10.6% to 13.95 ($19.95). Marconi(MONI) fell 67p to 743.

Among the telcos, British Telecom (BTY) had a roller coaster ride as it jumped about between 672p and 720p. Investors were initially pleased that the telco decided not to participate in Switzerland's auction for third-generation mobile licenses -- its withdrawal forced the government to postpone the auction, because now there are only four bidders for four licenses.

Also the Financial Times reported that British Telecom is considering taking Vodafone (VOD) and Vivendi (VVDIY) to court over the creation of their multiaccess Internet portal Vizzavi. British Telecom claims that the establishment of Vizzavi in France harmed Cegetel, its mobile-phone venture with Vivendi. However, eventually British Telecom succumbed to the overall selling pressure and the shares closed off 10.5p, or 1.5%, at 689.5.

Vodafone was jittery ahead of its fiscal first-half results Tuesday. The stock closed down 6.75p, or 2.8%, at 238.25, close to the bottom of its recent range.

Lower down in the sector, Atlantic Telecom and Kingston Communications initially rose on talk that the companies were looking to combine their networks. But they couldn't hold onto the gains and Atlantic closed down 5.5% at 164.5p, while Kingston fell 8.0% to 241.

Internet security software maker Baltimore Technologies(BALT) rolled out its Baltimore SelectAccessTM, which it describes as the "next generation in policy-driven access and authorization management software". But Monday the market was unimpressed, and Baltimore's fell 39.5p, or 8.6%, to 420.5p.

It wasn't any better in the media sector: Magazine publisher Future Network plunged 46.9% to 260p after the company warned it sees 2000 earnings well below expectations.

Investors will hope that Vodafone will provide the catalyst to stop the rot when it releases its results, but with no end in sight to the wrangling over the U.S. Presidential election, this seems unlikely.

Europe's other stock markets ended Monday lower as well, as the CAC-40 in Paris closed down 109.8 points, or 1.8%, at 6037.7, and the Xetra Dax in Frankfurt was off 151.6, or 2.2%, to 6700.1 late in German trading. As the Nasdaq plummeted, the Neuer Markt's tech-heavy Nemax 50 index tanked 430.8 points, or a massive 10.6%, to 3637.1.

Bloodied technology shares naturally led the way lower, as STMicroelectronics(STM) closed down 1.10 euros, or 2.2%, at 48.40 ($41.64); Epcos (EPC) fell 5.30 euros, or 6%, to 83.60; and software maker SAP(SAP) dropped 12.00 euros, or 5.7%, to 199.00.

Telcos were also in the red, despite the prospect of lower costs for Swiss UMTS licenses as the government postponed the auction after two bidders looked set to merge. France Telecom(FTE) closed down 3.20 euros, or 3%, at 104.80; Deutsche Telekom(DT) fell 0.93 euro, or 2.4%, to 38.02 euros and Telefonica (TEF) dropped 0.30 euro, or 1.5%, to 20.40.

Of the few stocks to buck the downward trend, DaimlerChrysler(DCX) was 0.20 euro higher, or 0.4%, to 54.00 and Total Fina Elf(TOT) was 1.30 euros higher, or 0.8%, to 161.90.

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