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Techs sink European markets

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LONDON, England (CNN) -- European markets sank on Wednesday after a huge loss by U.S. chipmaker Micron sent tech and telecom stocks spiralling on both sides of the Atlantic, while fears of war with Iraq also pummelled Wall Street.

London's FTSE 100 fell 1.9 percent to 3,835.2 and the CAC 40 blue chip index in Paris lost 2 percent to 3,116.89, while Frankfurt's electronically traded Xetra Dax was down 3.1 percent to 3,043.38 in late trading (the German markets was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.9 percent.

Micron Technologies (MU) -- the world's biggest maker of computer memory chips -- on Tuesday posted a fiscal first quarter loss of $316 million. The loss was greater than analysts had expected but underlined the poor state of the telecom communications industry and overcapacity in the chip sector. (Full story)

"Reality bites. Micron underlines that despite the market run-up recently, there's still no confidence about growth and earnings," David Thwaites, European strategist at BNP Paribas, told Reuters.

STMicroelectronics (PSTM), Europe's biggest chip maker, fell 7 percent to 19.85 euros, while Infineon Technologies (FIFX), the region's No. 2, was down 8.4 percent to 7.19 euros in late Frankfurt trading and Philips Electronics, the third biggest, slid 5.8 percent to 17.10 euros. UK chip designer ARM Holdings (ARM) dropped 7.6 percent to 51.75 pence.

Dutch Chip equipment maker ASML lost 14.8 percent to 7.33 euros. ASML also said it would cut 22 percent of its workforce by July next year and sell its U.S. thermal operations in a bid to deal with a slump. (Full story)

Alcatel (PCGE), the French telecom equipment maker, fell 4.9 percent to 4.51 euros.

Germany's SAP (FSAP), Europe's biggest software maker, was down 3.6 percent to 81 euros in late Frankfurt trading, while France's Cap Gemini (PCAP), Europe's biggest computer services company, lost 6.5 percent to 22.95 euros.

Wireless stocks took a dip after Chris Gent, the chief executive of Vodafone (VOD) said he would step down next July. Shares in Europe's biggest mobile phone company lost 2.4 percent to 110.25 pence. (Full story)

UK rival mm02 (OOM) lost dropped 8.7 percent to 44.75 pence, while French mobile phone operator Orange (PORA) declined 4.4 percent to 6.79 euros.

Nokia, the world's biggest maker of mobile phones, was down 5.5 percent to 16 euros, while rival Ericsson fell 6.2 percent to 6.80 Swedish crowns.

Germany's Allianz (FALZ), Europe's biggest insurer, was down 2.8 percent to 202.20 euros in late Frankfurt trading. Chief Executive Henning Schulte-Noelle resigned on Wednesday and the group said he would be replaced by board member Michael Diekmann who is expected to accelerate reforms. (Full story)

"It was a short-term negative reaction because Schulte-Noelle is very highly respected and he did an excellent job over the years, except perhaps with the Dresdner deal and there's speculation that that's why he's going," one trader told Reuters.

The AEX index in Amsterdam fell 2.1 percent and Milan's MIB30 index lost 2.3 percent, while the SMI in Zurich declined 2 percent.

In the U.S. on Wednesday, a bigger than expected first quarter loss by Micron Technology and Conseco's bankruptcy roiled tech stocks and the broader market in early trading.

At 1430 GMT, the Nasdaq composite was down 17.45 points to 1374.60, while the Dow Jones industrial average lost 59.65 points to 8475.74 and the Standard & Poor's 500 index fell 5.97 points to 897.02.

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