Europe finishes near 7-month lows

LONDON, England (CNN) -- European markets ended at near seven-month lows on Thursday, pressured by tech and telecom stocks, with little direction coming from Wall Street.

Leading the declines were telecom giants Nokia and Ericsson, as investors continued to express doubts about the outlook for the sector. Telecom equipment maker Alcatel also plunged on concerns over falling prices in the mobile industry.

London's FTSE 100 fell 0.8 percent to 5,040.8 and the CAC 40 blue chip index in Paris dropped 1.7 percent to 4,260.14, while Frankfurt's electronically traded Xetra Dax was down 2.1 percent to 4,778.05 in late trading (the German markets was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, fell for a third straight session. It closed down 1.3 percent to 1,167 points, its lowest level since November.

Nokia, the world's biggest mobile phone maker, slipped to near nine-month lows in Helsinki, falling 3.4 percent to 14.44 euros in Helsinki on investors' concerns about the outlook for its market. The decline came as Chief Financial Officer Olli-Pekka Kallasvuo told a technology conference in Budapest that he expects sales to pick up next year as growth continues in the U.S. and Chinese markets. (more)

Swedish rival Ericsson fell 5.7 percent or 21.40 crowns on speculation that the company's planned 3 billion euro rights issue may not be sufficient to resolve its cash flow problems.

"At the current burn rates, the 3 billion euros will just last a quarter, so Ericsson may well have to have a much larger issue by the third quarter," HSBC said in a note to investors.

France's Alcatel (PCGE) fell 6.2 percent to 12.12 euros after the head of its mobile networks unit said growing price pressures were causing some existing contracts for third generation mobile equipment to be renegotiated downward. "The company has no choice but to cut its prices in line with the rest of the market, also in cases of already agreed deals," said Marc Rouanne.

Vivendi Universal (PEX), the world's second-largest media company, fell 5.1 percent to 32.02 euros after a marathon board meeting in New York on Wednesday yielded no action plans to cut debt. The board, however, created a new committee to oversee Chief Executive Jean-Marie Messier's management. (more)

South African Breweries (SAB) fell 0.9 percent to 564 pence after agreeing to buy Miller of the U.S. for $5.6 billion to create the second-biggest brewer in the world. (more)

Among the continent's most closely watched stocks, Deutsche Telekom (FDTE), struggling with its own 60 billion euro plus debt pile, fell 5.1 percent and Vodafone (VOD), the world's biggest mobile phone operator, lost 3.8 percent to 103.7 pence in London.

France's STMicroelectronics (PSTM), Europe's biggest chipmaker, fell 3.1 percent to 29.16 euros, while German rival Infineon Technologies (FIFX) lost 3.1 percent to 17.56 euros and Philips Electronics, Europe's biggest consumer electronics company and No. 3 chipmaker, dropped 6.2 percent to 32.10 euros.

ARM Holdings (ARM), Europe's biggest chip designer, extended the previous session losses, falling 8.3 percent to 171 pence, valuing the company at less than £2 billion and threatening its existence in the FTSE 100 benchmark index.

Britain's Granada (GAA) slipped 1.5 percent to 128 pence after it posted a half-year loss, as the collapse of joint pay TV venture ITV Digital and an advertising recession took their toll on the popular TV broadcaster. (more)

In Amsterdam the AEX index lost 1.9 percent and Milan's MIB30 index fell 1.6 percent, while the SMI in Zurich declined 0.8 percent.

In the U.S. on Thursday, early losses caused in part by continued weakness in the dollar (more) were erased as stock markets observed two minutes of silence as part of the solemn ceremony at the site of the Sept. 11 terrorist attack that killed more than 2,800 people.

At midday, the Nasdaq composite index was up 2 points, or 0.2 percent, to 1,626, while the Dow Jones industrial average was down 10 points, or 0.1 percent, to 9,913.