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Europe stumbles on gloomy data
LONDON, England (CNN) -- European markets tumbled to a finish on Tuesday, led by telecom stocks, as a gloomy survey on the German economy and early declines on Wall Street sparked a late selloff. U.S. investors were also discouraged by weaker-than-expected consumer confidence numbers and a big decline in new home sales. London's FTSE 100 fell 1.2 percent to 4,071 and the CAC 40 blue chip index in Paris lost 2.4 percent to 3,215.19, while Frankfurt's electronically traded Xetra Dax as down 2.8 percent to 3,208.39 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 2 percent. The Ifo economic institute in Germany said business sentiment in Europe's biggest economy fell to 87.3 in November from 87.7 -- but that was better than analysts' forecasts. The institute said the west German economy was stabilising but concerns remain. (Full story) The survey put more pressure on the European Central Bank to cut interest rates to spur growth in Germany and the other 11 countries in the euro zone. "The best you can say is that the German economy remains in dire straits and under duress and as far as what it means for policy... it's a beacon call to the ECB to cut rates," David Brown, an economist at Bear Stearns, told Reuters. The European telecom sector was among the hardest hit on Tuesday due to growing concerns over growth in profits. France Telecom (PFTE) lost 9.7 percent to 14.76 euros amid speculation it might issue more shares and may sell its mobile unit Orange (POR), which was down 5.2 percent to 6.87 euros at midday. Deutsche Telekom (FDTE) was down 6.9 percent to 11.20 euros in late Frankfurt trading as investors expected any possible stock issue by France Telecom to have an negative effect on the German operator. "It is a continuation of Deutsche Telekom under performing after its analyst presentation last week and there are fears of a capital increase at France Telecom and that has spilled over into Deutsche Telekom as well," one analyst told Reuters. UK group Cable & Wireless (CW) lost 4.6 percent to 77.75 pence. On Tuesday its chairman designate, David Nash, announced he was quitting after holdings meetings with shareholders -- many of whom have criticised C&W's management and have called for a shake-up. (Full story) Vodafone (VOD), Europe's biggest mobile phone operator, fell 4.1 percent to 117.16 pence, while UK rival mm02 (OOM) tumbled 10.3 percent to 48 pence. Ericsson, the world's biggest maker of wireless communications networks, plunged 9.3 percent to 8.80 Swedish crowns after consultants Gartner Dataquest said the Swedish company's mobile phone joint venture Sony Ericsson needs to bring out more products if it wants to halt a devastating decline in sales. (Full story) The group's shares came under additional pressure when analysts attending a presentation in New York said Ericsson officials provided no new evidence of a recovery in the sector. Meanwhile, ING, the Dutch bank and insurance group, fell 7.2 percent to 18.14 euros after it said it would sell 36 million of its outstanding shares in an effort to bolster its balance sheet. Dutch-Belgian financial services group Fortis fell 6.9 percent to 16.85 euros after ABN AMRO cut its estimates on the group's earnings between 2002 and 2004. In the media sector, Vivendi Universal (PEX), Europe's biggest media company, rose 3.4 percent to 15.30 euros after the debt-laden French company posted lower-than-expected operating profit but said it was making progress in selling assets to pay down its debt pile. (Full story) British broadcaster Carlton Communications (CCM), which is merging with rival Granada, gained 8.2 percent to 144.85 pence after the company offered hope to the media sector saying it made a good start to its financial year and advertising revenue would grown by 2 percent in the first quarter. Granada (GAA) gained 2.4 percent to 85.7 pence at midday. EasyJet (EZJ), Europe's biggest budget airline, fell 13.6 percent to 361 pence as many investors took profits after the carrier posted a jump in full-year profit as passengers flocked to its low fares. Its stock has soared more than 50 percent since an upbeat trading update in October. (Full story) The AEX index in Amsterdam was down3.1 percent, Milan's MIB30 index lost 1.6 percent and the SMI in Zurich slipped 1.2 percent. In the U.S. on Tuesday, investors sold off stocks in early trading amid weakness in technology and financial shares combined with disappointing consumer confidence and housing data. (Full report) At 1515 GMT, the Dow Jones industrial average was down 145.56 points to 8703.84, while the Nasdaq composite fell 18.64 points to 1463.26 and the Standard & Poor's 500 index lost 10.81 points to 922.07.
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