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France Telecom leads markets down
LONDON, England (Reuters) -- European bourses traded lower late on Tuesday as investors mulled whether current fundamentals justified further gains, with France Telecom heading decliners amid worries over sales trends at its Orange mobile unit. Shares across the telecom, financial and energy sectors fell prey to some profit-taking after a nearly uninterrupted buying spree that propped up European bourses about 20 percent above a six-year trough hit on March 12. Swedish telecoms equipment maker Ericsson was the star of the session, gaining 16 percent after posting first quarter results that contained no major negative surprises and pleasing investors with new plans to cut thousands more jobs to reduce costs. Some strategists saw only limited upside for stock markets, even if companies continued to boost profits in the medium-term as investors weighed promising corporate data against a still-murky economic outlook. A much-better-than-expected U.S. consumer confidence reading hence failed to durably lift sentiment as economists said that this survey would have to be correlated by consumption and sales data before they can consider it encouraging. "The data showed an improvement as many expected with the end of the Iraqi war, but we must remain cautious as one figure alone does not make a trend and we still need some hard figures like retail sales to show us if consumers are really flocking back to the shops," said economist Valerie Plagnol from French bank CIC. At 1610 GMT FTSE Eurotop 300 index of pan-European blue chips shed 0.4 percent to 823 while the euro zone DJ Euro Stoxx 50 index was down 0.9 percent at 2,331 points. Among national benchmarks, the French CAC 40 index skidded 0.3 percent to end 2940, the British FTSE 100 closed 0.3 percent lower at 3927, the Swiss Market Index was one percent down. The German Dax index traded 1.5 percent lower at 2908. On Wall Street, the blue chip Dow Jones industrial average and the tech-laced Nasdaq Composite were 0.1 and 0.5 percent lower respectively. France Telecom featured among the biggest decliners of the session, off five percent despite posting a 7.3 percent rise in first-quarter sales as some analysts expressed concern about subscriber figures in Orange's core French and British markets. Orange shares closed 4.7 percent lower. Heavily-weighted energy shares also lent on the market as investors fretted about a poor outlook for oil company earnings due to falling crude prices despite sector giant BP posting its biggest-ever quarterly profit. On the upside, Ericsson jumped after the technology powerhouse underlined its commitment to defending its margins by announcing searing new job cuts. Ericsson rival Alcatel also gained 2.6 percent after coming up with a first-quarter net loss that narrowed to 461 million euros, although enthusiasm for the stock was tempered after the French group said the outlook for its market was worse than earlier forecasts. Another gainer was French building materials group Lafarge, up nine percent after it posted a 14.4 percent drop in first-quarter sales on Tuesday, hurt by a weaker dollar, though its shares rose as analysts focused on a smaller-than-expected decline in like-for-like turnover.
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