Europe faces tense week

July 14, 2001 Posted: 1252 GMT

LONDON (CNN) -- European markets will be on tenterhooks in the week ahead as they await a barrage of results from blue chip technology companies.

Market watchers have been prepared for unimpressive second quarter figures by dozens of tech companies, including the world's biggest mobile phone maker, Nokia, and Philips, Europe's largest consumer electronics maker.

Europe's biggest software company, SAP, is also due to report results.

But attention will be focussed on the techs' forecasts for the rest of the year.

World markets had surged on Thursday after U.S. technology heavyweights, Motorola, Yahoo! and Microsoft, gave brighter outlooks, but analysts and fund managers said Europe had yet to cope with one or two more quarters of weakness.

"The U.S. is going to take a long time to turn around and Europe will take a lot longer, but the sectors driving the U.S. economy are going to take a hit from unemployment," James Stewart, economist at fund manager Weavering Capital, told CNN.

A profit warning on Friday from Europe's biggest electronics components maker Epcos, citing a further weakening in business during June, also rattled investors.

The warning came amid the ongoing slowdown in telecom equipment and mobile phone demand and served as a reminder to investors that many European companies still face tough times ahead.

The Munich, Germany-based company said it expected earnings to be only about a third of the previous quarter and forecast the slump will last for the rest of its fiscal year.

David Thwaites, European equity strategist with BNP Paribas, told Reuters: "The worry is that it (Epcos) sets the pattern for the coming week.

"The hope is that the Americans continue with the positive news flow, but I think the fear is the Europeans are still six months behind and will come out with a few nasty surprises."

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