Insurers lead Europe lower

LONDON, England (CNN) -- European markets ended lower on Monday, led by insurance and telecom and stocks due to ongoing concerns over corporate earnings and economic growth.

London's FTSE 100 lost 1.1 percent to 4,180.9 and the CAC 40 blue chip index in Paris dropped 2.8 percent to 3,272.76, while Frankfurt's electronically traded Xetra Dax was down 2.7 percent to 3,611.10 in late trading (the German market was set to close at 1800 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.9 percent, with the insurance, computer, information technology and telecom sub-sectors leading declines.

Trading volume was thin on Monday, with U.S. markets closed for the Labor Day holiday.

Leading the telecom sector lower on Monday was France Telecom (PFTE), Europe's second-largest mobile phone company. Its shares plunged 10.4 percent to 11.43 euros after the Wall Street Journal said a report commissioned by the French group into its affiliate MobilCom cast doubt over the German mobile phone company's ability to compete with bigger rivals. (Full story)

QUICKVOTE Twenty-one of the last 30 Septembers have yielded stock market losses on the month. Can this month buck the trend? Yes No View Results

Vodafone Group (VOD), Europe's biggest mobile phone company, fell 3.6 percent to 99.75 pence. The Financial Times said the British company was planning to make a unsolicited bid for SFR, the French mobile phone company controlled by Vivendi Universal (PEX). Vivendi, which may be reluctant to sell the business, slipped percent to 12.70 euros. (Full story)

Sweden's Ericsson, the world's biggest supplier of mobile phone networks, fell 5.6 percent to 6.75 crowns as investors digested the high response to the group's $3.2 billion new share issue, which closed last Thursday.

Siemens (FSIE), the German electronics and engineering group, dropped 3.1 percent to 46.55 euros after the company declined to comment on a report that it could withdraw over 8,000 planned job cuts, or one-quarter of the total announced since last year. (Full story)

France's STMicroelectronics (PSTM), Europe's biggest chip maker, slipped 2.2 percent to 20.15 euros, while Germany's Infineon Technologies (FIFX), the region's No. 2 chip maker, was down 4.4 percent to 11.25 euros in late Frankfurt trading. Philips Electronics, Europe's third largest chip maker, fell 2.2 percent to 19.95 euros.

The insurance sector came under more pressure after a report that insurer Zurich Financial, Europe's third-largest insurer, will launch a $2.5 billion share offer when its releases first-half results on Thursday. A company official declined to comment on the reports. Its shares plunged 9.2 percent to 134.75 Swiss francs.

France's Axa (PCS), the region's No. 2 insurer, lost 5.3 percent to 13.23 euros and Britain's Royal Sun & Alliance (RSA) dropped 5.2 percent to 117.21 pence, while German re-insurer Munich Re (FMUV2) was down 4.5 percent to 177.40 euros in late Frankfurt trading.

Italy's biggest insurer Generali dipped 2.7 percent to 18.83 euros after Credit Suisse First Boston cut its earnings forecast.

European insurance companies are being forced to raise additional funds after falling stock markets wiped out some of their holdings, which are held to meet claims.

Sanofi-Synthelabo, France's second-largest drugmaker, dropped 9.7 percent to 55.20 euros after it warned sales would grow slightly slower in the second half of 2002 that its did in the first. (Full story)

The AEX index in Amsterdam declined 2.1 percent and Milan's MIB30 index lost 1.6 percent, while the SMI in Zurich fell 2.6 percent.

Meanwhile, this week could mark the start of another September sell-off, a period when markets traditionally tumble.

"It has been a long hard August with significant volatility. Twenty-one of the last 30 Septembers have yielded losses on the month. It is difficult to see that this September will buck the trend," David Buik of financial betting group Cantor Index said in a note to investors.

John Butler, a strategist at Dresdner Kleinwort Wasserstein, told CNN: "Historically September's been bad but we don't base our strategy on that. But we don't think this is the time to be bullish.

"We base our strategy on profitability and economic data and we have said for some time we are overweight on bonds. It's been really surprising how weak profits over the last few weeks have been. Economic data is pointing down."

In the U.S. on Friday, a late-day swoon sent stocks into the red for the final session of the month.

After being up as much as 110 points in afternoon trading, the Dow Jones industrial average finished down 7.49 points at 8,663.50. The Standard & Poor's 500 dropped 1.73 to 916.07, while the Nasdaq composite closed down 20.92 at 1,314.85.