Tech stocks lead Europe lower
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LONDON, England (Reuters) -- Europe's top shares ended down on Monday, hobbled by German tech companies Infineon and T-Online amid fresh doubts about U.S. company valuations and interest rates.
Europe's second-biggest chipmaker Infineon lost 5.8 percent despite its first profit in 10 quarters of 67 million euros in the three months to end-September -- below the consensus forecast of 95 million euros.
Internet service-provider T-Online, a unit of Germany's dominant phone carrier Deutsche Telekon lost 4.2 percent ahead of third-quarter earnings due on Tuesday, which are expected at 79 million euros.
The losses came as its domestic rival freenet.de, blaming the record hot summer, said third-quarter net profits halved to 6.4 million euros. Freenet.de shares had given up 11.0 percent by the close.
The FTSE Eurotop 300 index ended 0.92 percent down at 932.87 points, below the 2003 high of 945.63 set on Friday. The ratio of decliners to gainers was nearly three to one.
The narrower DJ Euro Stoxx 50 index was 0.92 percent lower at 2,633.07.
Strategists said European markets were worried that U.S. equity markets may be overvalued and that the Federal Reserve may hike interest rates sooner than expected given the strong U.S. October jobs data released last Friday.
But in Europe, the upward market trend is still intact.
"Markets do not always follow a straight line,'' said Joerg Kraemer chief strategist at Invesco Asset Management. "We continue to be significantly overweight in European equities.... They are still significantly undervalued.''
Tuesday is likely to be another lackluster day for trading with little new economic news from the United States. However, Germany's widely-watched Zew index for November could boost sentiment if it matches or beats the consensus forecast.
Around Europe, London's FTSE 100 closed down 0.80 percent, while Paris's CAC-40 gave up 0.81 percent and Frankfurt's DAX fell 0.96 percent. Zurich's SMI ended 1.08 percent lower.
Over on Wall Street, the Dow Jones industrial average was down 0.46 percent to 9,764.84 points while the tech-laced Nasdaq Composite surrendered 0.83 percent to 1,954.32 points by 1655 GMT.
Technology stocks drag
The best-performing sector so far this year, technology reversed some of its hefty gains as chipmakers, among them Philips with losses of two percent, and telecoms came under fire.
Finnish-based Nokia lost two percent, despite sources denying the world's biggest mobile handset maker was in talks to take over British software company Psion.
Europe's largest biotechnology company Serono was down 3.4 percent after tapping investors for 600 million Swiss francs with a convertible bond, fueling speculation it might soon hit the acquisition trail.
In the wider health sector, drugs companies also came under pressure with AstraZeneca down 3.3 percent on competition worries for its Crestor Cholesterol drug.
French rival Aventis fell 2.1 percent, UK-based Glaxosmithkline lost 1.2 percent and Swiss-based Roche was down 1.3 percent.
But on a brighter note, German Utility company RWE picked up 2.7 percent after an upgrade to "buy'' from "accumulate'' by Commerzbank and ahead of an earnings report on Thursday.
Stronger global growth and demand for metals boosted Johnson Matthey 1.6 percent after UBS raised its price target to 985 pence per share from 900 pence.
Meanwhile bucking the trend in the telecoms sector, down one percent, was Portugal Telecom. The share hit a 17-month high on Monday after a change to Euronext Lisbon's trading platform.
Portugal Telecom shares ended up 2.7 percent.
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