European Midday Update: Markets Sharply Lower

LONDON -- The FTSE 100 broke below the 6000 level for a few fleeting minutes Wednesday morning before recovering to 6008.5 -- an overall fall of 78.3 points. It's too soon to say at the moment whether this is the beginning of a spirited comeback or merely brief respite from an ongoing downward trend.

The Techmark showed no sign of halting its recent slump, and was down a further 113.0 points to 2804.1. Major casualties in the tech sector include BATM Advanced Communications down 255p at 30.37 ($44.64) and CMG 258p lower at 31.18.

Telecom stocks weren't far behind. Vodafone AirTouch (VOD) took another beating, with the price down 7p at 248 -- a 37% loss in the past 11 weeks. Vodafone must sell Orange as part of the agreement made when it bought Mannesmann(MNNSY). However, investors are now worried that the terms of sale are likely to be challenged by regulators if any share deal is included, as this would leave Vodafone still holding shares in Orange.

British Telecom (BTY) slipped 18p to 854 and Colt Telecom (COLTY) shed 102p to 17.03.

Media stocks completed the picture of misery, as Pearson fell 26p to 16.99 and Reuters (RTRSY) was 47p lower at 888.

Europe's other stock markets were lower. The Xetra Dax in Frankfurt was down 108.0 at 6,919.7 and the CAC 40 in Paris was 128.1 lower at 6020.5. The Neuer Markt's tech-heavy Nemax 50 index was off 194.6 at 5766.1.

In Frankfurt, big techs suffered the hardest after the Nasdaq's sharp plunge Tuesday afternoon. Siemens (SMAWY) fell 3.95 euros to 142.75 ($129.40), Epcos (EPC) was down 3.76 euros at 122.00 and software maker SAP (SAP) dropped 20.95 euros to 538.15.

Carmakers were able to buck the downward trend, as BMW climbed 0.25 euros to 30.95 and DaimlerChrysler (DCX) rose 0.33 euros to 61.25. Not all old economy stocks were not spared, however, as industrial giant Thyssen Krupp plunged 2.60 euros to 20.35 after posting disappointing earnings.

Major European telecoms were all lower, with Deutsche Telekom (DT) down 2.20 euros at 56.50, Telefonica (TEF) off 0.38 euro at 20.07 and France Telecom (FTE) 5.80 euros lower at 131.50.

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