Telecoms lead Europe lower

Traders take orders for the London Stock Exchange

LONDON, England (CNN) -- Europe's major markets ended lower on Monday, led by big-name telecom stocks amid growing concerns over weak profits and overcapacity.

London's FTSE 100 slipped 0.1 percent to 5,153.9 and the CAC 40 blue chip index in Paris lost 0.5 percent to 4,430.38, while Frankfurt's electronically traded Xetra Dax was down 0.4 percent to 4,982.73 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 0.3 percent, with the information technology and telecom sub-indices among the main decliners.

Nokia, the world's biggest mobile phone maker, fell 3.7 percent and Swedish rival Ericsson lost 2.3 percent. France's Alcatel (PCGE), the world's fifth-largest telecom equipment maker, dipped 2.2 percent.

"It will probably be two or three weeks before the bad news from the telecom equipment makers is fully digested and it's difficult to pin-point where the lows will be for these stocks," Henning Kelch, European fund manager at Commerz Asset Managers, told Reuters.

"There's still an overcapacity in the sector. It's taken longer than anticipated to roll out the new 3G [third generation telephone] services and that pushes back revenues which these companies had expected this year."

Meanwhile, Siemens (FSIE), the German electronics and engineering powerhouse, was down about 1 percent in late Frankfurt trading after a newspaper reported it would consider buying some assets from U.S. rival Motorola, the world's second-largest maker of mobile phones.

In the media sector, Vivendi Universal (PEX) dipped 1 percent after it said it would begin legal action on Monday over suspected voting fraud. Vivendi Chief Executive Jean-Marie Messier said the board will call for a new shareholder meeting to vote on controversial plans to reward executives with 2 billion euros ($1.9 billion) in stock options.

But shares in UK media companies, Granada (GAA) and Carlton Communications (CCM) rose after a report over the weekend said that the two were once again looking at a merger. Granada closed up 3.6 percent and Carlton ended 0.8 percent higher after soaring 6 percent in early trading.

Allied Domecq (ALLD), the world's second-largest spirits group, rose 3.2 percent after it said pretax profit rose 6 percent in the first six months of its fiscal year.

But the company, which makes Ballantine's scotch, Sauza tequila, Beefeater gin and Kahlua liqueur, warned some of its top brands had underperformed in the U.S. after hefty price hikes.

The banking sector was in focus as three of Europe's top names reported earnings. Deutsche Bank, Europe's biggest bank, was down 1.2 percent in late Frankfurt after saying first quarter net income rose 56 percent after it sold shares in a number of companies.

ABN Amro, the Netherlands biggest bank, fell 1.6 percent in Amsterdam. It said net income after costs dropped 42 percent in the first quarter.

And Spain's biggest bank Santander Central Hispano reported a first-quarter net income of 670.5 million euros ($602 million), below expectations. Its share rose 1.1 percent after trading lower for most of the session.

In Amsterdam the AEX index slipped 0.8 percent, while Milan's MIB30 index was flat and the SMI in Zurich was up 0.6 percent.

In the U.S. on Monday, stocks were stalled as investors found little incentive in the day's economic and corporate news to get back in the market following a sharp selloff last week that pushed major indices to recent lows.

At midday, the Nasdaq composite index was up 2.22 points, or 0.1 percent, to 1,666.11, while the Dow Jones industrial average was down 6.51 points, or 0.1 percent, to 9,904.21.