European blue-chips were mired near their intraday lows as Wall Street opened lower yesterday afternoon, with airline and tourism stocks under pressure after the weekend bomb blasts on the tourist island of Bali.
Autos stocks were also subdued after investment bank Merrill Lynch cut its ratings on key US auto stocks, citing a negative pricing outlook. DaimlerChrysler, exposed to the US through its Chrysler division, fell 4.4 per cent. France Telecom was Europe's biggest loser, falling 7.8 per cent as investors awaited news on how newly installed Chief Executive Thierry Breton plans to recapitalise the debt-laden company.
By 1345 GMT, the FTSE Eurotop 300 index was off 1.1 per cent at 847 points as the narrower DJ Euro Stoxx 50 index fell 1.4 per cent to 2,319 points.
The Dow Jones industrial average fell 0.6 per cent in the first few minutes of trade, while the Nasdaq Composite index shed 0.9 per cent.
Traders said sentiment in Europe was subdued after bomb blasts in Bali on Saturday killed more than 180 people, raising fears that fewer people would be willing to travel and heightening anxieties about geo-political stability.
A statement purported to have been issued by Saudi-born militant Osama bin Laden and broadcast by Qatar's Jazeera television increased those jitters.
The statement, which Jazeera said bore bin Laden's signature, hailed last week's attacks on US Marines in Kuwait and a French supertanker off Yemen and urged Muslims to unite against Americans and Jews.
Airline stocks were among the day's big losers, with Air France down five per cent, Lufthansa off 5.6 per cent and no-frills airline EasyJet off 5.1 per cent.
Europe's biggest travel firm TUI fell 6.5 per cent as French-listed Club Med sank 12.7 per cent.
Elsewhere, German banks were under pressure after Merrill Lynch lowered its earnings forecasts on expectations of a tough end to the third quarter and a lower growth outlook for 2003.
Hpyovereinsbank shed 6.1 per cent and Deutsche Bank lost 5.4 per cent.
AstraZeneca was one of the few bright spots, jumping 11.9 per cent after a US court ruled that three generic drugmakers infringed some of the company's patents over blockbuster heartburn drug Prilosec.
A fourth company, SchwarzPharma of Germany, was ruled not to have infringed a patent, leaving the door open for it to produce a cheaper generic form of the drug.
Shares in SchwarzPharma leapt 71.44 per cent.