Europe hit by techs, telecoms

Traders at the Frankfurt Stock Exchange take investors' orders

LONDON, England (CNN) -- European markets ended the week lower as techs telecoms fell after a warning from British IT group Logica and the continuing fallout from a downgrade of U.S. giant WorldCom.

Logica (LOG) plunged 17.4 percent -- but off its lows for the session -- after it said on Friday that revenue would be flat and earning per share before costs was expected to be "significantly" below last year's level, as mobile phone companies rein in investment. Logica said it did not expect a recovery until late 2002 and that it would need to cut 700 jobs. (full story)

WorldCom (WCOM) shares continued to fall on Friday after Moody's Investors Service and Fitch cut the company's long term debt to junk status, making it more expensive for the debt-laden phone service provider to borrow money. Adding to the tech jitters was IBM (IBM), which said it was cutting staff because of slowing sales.

London's FTSE 100 slipped 0.5 percent to 5,171.2 and the CAC 40 blue chip index in Paris dropped 1.3 percent to 4,329.84, while Frankfurt's electronically traded Xetra Dax was off 1.7 percent to 4,883.48 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 1.1 percent, with the information technology, telecom and computers services sub-indices leading declines.

"In the short term, I think the market is going to be volatile and will move more or less sideways from here," Hendrick Garz, European equity strategist at West LB Panmure, told Reuters. "Uncertainty over the sustainability of an economic recovery in the U.S. is very deeply rooted."

Logica's warning pressured rival CMG (CMG), which saw its shares fall 9.3 percent in London, while Cap Gemini (PCAP) sank 6.4 percent in Paris.

Nokia, the world's biggest mobile phone maker, fell 4.9 percent and Swedish rival Ericsson dropped 6.4 percent. Alcatel (PCGE), the world's fifth-largest telecom equipment maker, lost 3.7 percent, while Siemens (FSIE), the German electronics and engineering powerhouse, rose 0.5 percent -- after falling about 1.5 percent early in the session.

France Telecom (PFTE) shed 9.7 percent, while Deutsche Telecom (FDTE) was down 7.2 percent in late Frankfurt trading. Spanish telecom operator Telefonica lost 4 percent ahead of what are expected to be weak first quarter results next Thursday.

Both Vodafone (VOD), the world's biggest mobile phone operator, fell 4.6 percent and UK rival mmo2 (MOO) lost 6.1 percent, while Orange (PORA), Europe's third-largest operator, dropped 5.5 percent.

In the media sector, Rupert Murdoch's British Sky Broadcasting (BSY), Europe's second-largest pay-TV broadcaster, said its third-quarter loss narrowed as it signed up more people for its digital platform. (full story) Its stock fell 3.8 percent in London.

In Amsterdam the AEX index dropped 1.6 percent and Milan's MIB30 index slipped 1.4 percent, while the SMI in Zurich lost 0.9 percent.