European shares end one per cent weaker on tech worries

European stock markets closed lower across the board yesterday as a profit warning from Dell hit US stocks, while results from Infineon and Ericsson also disappointed.

The DJ Stoxx technology sector index headed losers with a 2.8 per cent fall, bringing its losses so far this year to eight per cent, the worst performer among the 18 sector indexes.

Shares in Infineon fell seven per cent and Ericsson lost one per cent yesterday.

The pan-European FTSEurofirst 300 index of leading shares ended 0.9 per cent weaker at 1,290.2, near the day's low of 1,286.5 and down one per cent this week.

"I think companies will probably find it hard to hit the upper end of where analysts are pegging numbers," said Schroders fund manager Andrew Lynch, who is part of a team which handles $10 billion in European equities.

The technology results came ahead of a busy week for earnings, with about 30 per cent of companies in the DJ Stoxx 50 European index set to unveil numbers next week.

The Dow Jones industrial average lost 0.4 per cent and the tech-laced Nasdaq declined 0.8 per cent by the close of European markets, but were above intra-day lows.

Ericsson fell after its lower-than-expected gross margins and group sales overshadowed robust pre-tax profit. Nokia, which had disappointed with its results on Thursday compared with rival Motorola's, declined 2.2 per cent.

SAP declined 4.4 per cent after JP Morgan downgraded its rating on the software company to "underweight" from "overweight" and almost halved its price target, following SAP's disappointing figures reported in the previous session.

Around Europe, London's FTSE 100 shed 0.9 per cent, Paris's CAC-40 lost one per cent and Frankfurt's DAX tumbled 1.7 per cent.

"There is no impulse to lift markets at the moment," said Kai Stefani, strategist at fund manager dit.

Miners, which have gained from strong Chinese demand in recent years, declined, with Antofagasta, BHP Billiton and Rio Tinto down between three and five per cent as China raised its bank reserve requirements in a bid to cool its racing economy.

Among few standout gainers, shares in Software rallied 4.5 per cent after the German company's results beat the top end of analysts' estimates and it raised forecasts for licence sales.