European shares fell yesterday as the technology sector sank to its lowest level in nearly four months, buckling under disappointing outlooks from US bell-wether stocks.
The DJ Stoxx European technology index fell two per cent to its weakest level since the end of September, lagging the overall market after ending 2004 as the only industry group in the red.
Sector leader Nokia dropped 3.3 per cent, spooked by a profit warning from Finnish handset casing maker Perlos, whose shares fell 18 per cent.
Adding to the gloom, Japanese electronics firm Sony Corp. said it cut its operating profit estimate by 31 per cent for this business year, citing a worsening business climate in its mainstay electronics sector.
The FTSEurofirst 300 index closed unofficially down 0.36 per cent at 1,049.56 points, distancing itself further from last week's two-and-a-half-year high at 1,058.29 points as the earnings season serves up fresh outlooks from companies. The DJ Euro Stoxx 50 index closed unofficially off 0.7 per cent at 2,938.81 points.
Weaker-than-expected outlooks from US wireless technology firm Qualcomm and US online auctioneer eBay also hit the technology sector.
Sweden's Ericsson lost 2.8 per cent and Dutch Philips shed 1.3 per cent.
"The sector still seems quite highly valued. Long-term growth rates have definitely come down, so it should not really have such a premium rating," said Mark Bon of Canada Life fund.