Europe closes lower

December 10, 2001 Posted: 1703 GMT

LONDON (CNN) -- Europe closed lower on Monday, with technology stocks leading the retreat, as STMicroelectronics's biggest investors began to sell its stock.

France Telecom (PFTE) and Italian engineering company Finmeccanica said they were selling a 7 percent stake in Europe's biggest chipmaker STMicroelectronics (PSTM).

Finmeccanica lost 5.6 percent and France Telecom was down 1.8 percent after news of the shares sale. STMicroelectronics fell 8.5 percent and Europe's No. 2 chipmaker Infineon Technologies (FIFX) slid 5.7 percent.

Meanwhile, Philips Electronics, Europe's biggest consumer electronics and third-biggest chipmaker, lost 3.4 percent.

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London's FTSE 100 fell 1.4 percent to 5193.1 and the CAC 40 blue chip index in Paris dipped 1.9 percent to 4555.50, while Frankfurt's electronically traded Xetra Dax dipped 1.2 percent to 5138.28.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, declined 1.5 percent with the information technology and electronics/electrical sub sectors down around 4 percent each.

Among other closely watched technology stocks, Finland's Nokia – the world's biggest wireless phone maker, lost 4.5 percent and Germany's dominant communications company Siemens (FSIE) dipped 2.9 percent. Nokia is expected to issue a mid-fourth quarter update on trading conditions on Tuesday.

Software giant SAP (FSAP), Europe's biggest, dropped 1.2 percent in Frankfurt.

Pearson (PSON), the owner of the Financial Times newspaper, slid 4.1 percent after Trinity Mirror, Britain's largest newspaper publisher, said advertising revenues on it national titles were down 21 percent year-on-year. The company blamed the September 11 attacks on the U.S. for the decline and warned the ad market was expected to get worse.

BNP Paribas (BNP), France's biggest bank, fell 1.4 percent after agreeing on Monday to buy United California Bank from Japan's UFJ Holdings for $2.4 billion in cash. The deal is expected to strengthen BNP's  international position and gives it a bigger slice of the western U.S. banking industry.

In another deal involving a Japanese company, Swiss drugs giant Roche Holdings said it will pay ¥198 billion ($1.6 billion) for a majority stake in Japan's Chugai Pharmaceutical, giving it a major foothold in the world's second largest drugs market. Shares in Roche fell 0.2 percent in Zurich.

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British Airways (BAY) made a comeback from its midday 4.6 percent loss amid concerns for the global airline industry. Europe's biggest airline is drawing up plans to axe 10,000 jobs, the Observer newspaper said on Sunday. BA called the claim speculation and said it was conducting a review of its businesses. Its shares were up 1 percent at closing.

In Amsterdam the AEX index is down 2 percent and the SMI in Zurich is off 1.4 percent, and Milan's MIB30 index dipped 2 percent.  

In the U.S., investors awaiting word from the Federal Reserve avoided the stock market at midday on Monday, with the Dow Jones industrial average and Nasdaq composite index straddling the breakeven point one day before Fed policy makers meet to set interest rates.