Europe hit by telecoms

January 29, 2002 Posted: 1753 GMT

LONDON (CNN) -- European markets ended lower on Tuesday, led by telecoms stocks after mixed revenue results from some of the industry's biggest players.

London's FTSE 100 ended 1.8 percent lower at 5,131.4 and the CAC 40 blue chip index in Paris fell 1.4 percent to 4,476.1 while Frankfurt's electronically traded Xetra Dax was down 4.1 percent to 5,089.34 in late trading (the German exchange closes at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.5 percent, with telecoms stocks leading the declines, while the auto sector was among the gainers.

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Vodafone (VOD), the world's largest mobile phone operator, saw its share fall 3.9 percent in London after announcing its annual revenue per user declined in Britain and German in the third quarter, while remaining flat in Italy. 

France Telecom (PFTE), the country's dominant phone company, fell 3.4 percent. The company said on Tuesday sales rose 28 percent, boosted by its international operations and wireless unit Orange (PORA), Europe's third-largest mobile phone company by market value.

Orange topped the losers board in Paris, falling 5 percent after saying average revenue per user in the UK and France, its two biggest markets, had fallen.

Nokia, the world's biggest mobile phone maker, fell 2.9 percent in Helsinki, while Ericsson, the world biggest supplier of high-speed mobile phone networks, was down 3.7 percent in Stockholm.

UK telecom group Cable & Wireless (CW) fell 3.6 percent, with sentiment for the sector hurt by international carrier Global Crossing's decision to file for bankruptcy protection on Monday.

Deutsche Telekom [FSE:DTEGn] was down 4 percent in late trading in Frankfurt on concern that plans to sell the group's cable assets may be blocked by the German cartel office.

France's Rhodia, a specialty chemicals company, fell 2.7 percent. The company posted a bigger-than-expected net loss of 213 million, after restructuring its business and higher raw material prices.

Air Liquide, the world's biggest supplier of industrial gases, fell 2.4 percent. The company said fourth-quarter sales fell 8.4 percent to 2 billion as a slowing global economy dampened demand.

The automobile sector continued to strengthen, following gains on Monday, with German car makers benefiting from an increase in the country's key monthly business confidence index on Monday.

Volkswagen (FVOW), Europe's biggest car maker, was up 2 per cent – off its session highs – in late Frankfurt trading, while the world's second-largest luxury car maker BMW (BMWG) was up 1.5 percent – also off its highs.

French car maker Peugeot (PEUP) rose 0.7 percent, down from earlier highs, while Renault (RENA) came off its highs to close up 0.2 percent in Paris.

Among Europe's smaller markets, Amsterdam's AEX index slipped 0.9 percent and Milan's MIB30 index was down 0.8 percent, while the SMI in Zurich lost 1.4 percent.

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In the U.S. on Tuesday, Wall Street was lower in midday trading as concern grew over corporate accounting practices in light of the Enron scandal, with conglomerate Tyco International (TYC: down $6.50 to $35.50, Research, Estimates) and energy and pipeline operator Williams (WMB: down $5.90 to $18.24, Research, Estimates) coming under scrutiny.

The Nasdaq composite index was down 23.91 points, or 1.23 percent to 1,920, while the Dow Jones industrial average fell 109.89 points, or 1.1 percent, to 9,755.86.