LONDON (AFP) - European equities slid on Tuesday, with the telecommunications sector under selling pressure after mobile phone giant Vodafone warned over its sales outlook and Ericsson posted slumping profits.
By late morning, Londons FTSE 100 index of top companies had lost 1.56 percent to stand at 5,320.20 points.
Frankfurts DAX 30 slid 0.73 percent to 6,377.73 points and the Paris CAC 40 lost 0.76 percent to 4,294.24 near the half-way mark.
The Euro Stoxx 50 index of leading eurozone shares weakened by 1.13 percent to 3,296.31 points.
The European single currency stood at 1.5912 dollars.
Wall Street had fallen on Monday as investors consolidated gains from the past weeks rally and mulled Bank of Americas better-than-expected earnings.
Japanese share prices surged almost three percent Tuesday on easing worries about the US financial crisis, with the benchmark ending above the 13,000 points level for the first time in a week.
In Europe, the telecommunications sector bore heavy losses after British mobile phone group Vodafone said full-year sales would be at the lower end of expectations because of difficult trading conditions, particularly in Spain.
The news sent Vodafones share price tumbling by 12.7 percent to 130.35 pence.
It also hit the price of shares in Spanish peer Telefonica, which sank 7.06 percent to 16.06 euros on Madrids Ibex 35 index, which showed a sharp fall of 2.61 percent.
"The Spanish and UK telecoms markets, resilient to the economic slowdown to date, finally look to have cracked," said Collins Stewart analyst Mark James in London.
"It seems likely that earnings expectations, regardless of managements statements, are likely to get scaled back."
Vodafone said in a statement that full-year sales were forecast to be at the bottom end of its guidance range of between 39.8-40.7 billion pounds (50-51 billion euros, 79-81 billion dollars).
The company partly blamed the outlook on recent economic weakness, especially in Spain, and lower-than-expected equipment revenue.
In Stockholm, Ericsson, world leader in mobile phone network equipment, reported a 70-percent collapse of net profit for the second quarter and a two-thirds fall in operating margins.
Ericssons share price dived 8.52 percent to 68.7 Swedish kronor in Stockholm trading.
The group said it had been hit by slowdown in western Europe, weakness of the dollar and restructuring charges, and it expressed caution for performance for the whole of this year.
Net profit fell to 1.9 billion kronor (201.3 million euros, 320.6 million dollars) from 6.4 billion kronor in the same period of last year.
In the same sector, France Telecom dived 4.49 percent to 18.915 euros in Paris and Deutsche Telekom shipped 6.05 percent to 10.41 euros in Frankfurt.
In Asia on Tuesday, Tokyos main Nikkei-225 index gained 2.98 percent to 13,184.96 points as investors returned to work after a public holiday on Monday.
By late morning, Londons FTSE 100 index of top companies had lost 1.56 percent to stand at 5,320.20 points.
Frankfurts DAX 30 slid 0.73 percent to 6,377.73 points and the Paris CAC 40 lost 0.76 percent to 4,294.24 near the half-way mark.
The Euro Stoxx 50 index of leading eurozone shares weakened by 1.13 percent to 3,296.31 points.
The European single currency stood at 1.5912 dollars.
Wall Street had fallen on Monday as investors consolidated gains from the past weeks rally and mulled Bank of Americas better-than-expected earnings.
Japanese share prices surged almost three percent Tuesday on easing worries about the US financial crisis, with the benchmark ending above the 13,000 points level for the first time in a week.
In Europe, the telecommunications sector bore heavy losses after British mobile phone group Vodafone said full-year sales would be at the lower end of expectations because of difficult trading conditions, particularly in Spain.
The news sent Vodafones share price tumbling by 12.7 percent to 130.35 pence.
It also hit the price of shares in Spanish peer Telefonica, which sank 7.06 percent to 16.06 euros on Madrids Ibex 35 index, which showed a sharp fall of 2.61 percent.
"The Spanish and UK telecoms markets, resilient to the economic slowdown to date, finally look to have cracked," said Collins Stewart analyst Mark James in London.
"It seems likely that earnings expectations, regardless of managements statements, are likely to get scaled back."
Vodafone said in a statement that full-year sales were forecast to be at the bottom end of its guidance range of between 39.8-40.7 billion pounds (50-51 billion euros, 79-81 billion dollars).
The company partly blamed the outlook on recent economic weakness, especially in Spain, and lower-than-expected equipment revenue.
In Stockholm, Ericsson, world leader in mobile phone network equipment, reported a 70-percent collapse of net profit for the second quarter and a two-thirds fall in operating margins.
Ericssons share price dived 8.52 percent to 68.7 Swedish kronor in Stockholm trading.
The group said it had been hit by slowdown in western Europe, weakness of the dollar and restructuring charges, and it expressed caution for performance for the whole of this year.
Net profit fell to 1.9 billion kronor (201.3 million euros, 320.6 million dollars) from 6.4 billion kronor in the same period of last year.
In the same sector, France Telecom dived 4.49 percent to 18.915 euros in Paris and Deutsche Telekom shipped 6.05 percent to 10.41 euros in Frankfurt.
In Asia on Tuesday, Tokyos main Nikkei-225 index gained 2.98 percent to 13,184.96 points as investors returned to work after a public holiday on Monday.
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