Eurostocks end turbulent week with five per cent fall

European stock markets ended one of the most turbulent weeks in their recent history with falls of around five per cent yesterday as companies served up more evidence of pain than of gain in their earnings announcements.

Shares in Sweden's Ericsson tumbled 18 per cent after it announced one of the most discounted rights issues ever seen while German technology group Epcos plummeted 15.4 per cent after warning of a full-year operating loss.

The day's bleak corporate news lopped a further 215 billion euros off the value of Europe's top 300 companies and left Europe's benchmark indices close to four-year lows.

By 1540 GMT, with only Frankfurt still trading, the FTSE Eurotop 300 index of pan-European blue chips was 4.72 per cent lower while the narrower DJ Euro Stoxx 50 index was down 5.27 per cent.

Having started badly with a 5.2 per cent fall on Monday followed by a bounce-back in midweek, the indices stand around 5.5 per cent lower for the week.

"What markets need is direction and, more than anything else, confidence," said Roland Lescure, head of strategy and research at CDC Ixis Asset Management in Paris. "The market is cheap but that doesn't mean it's going to go up from here. That's going to take time."

The Ericsson and Epcos news helped chop six per cent off the DJ Stoxx technology index but the sell-off was by no means limited to technology stocks.

The healthcare, insurance and energy indices all lost more than five per cent, rekindling fears that markets could be in for further, bruising short-term falls.

"I don't buy into the idea of a further 20 or 30 per cent fall in share prices, or of lower long term returns from equities," Lescure said.

"However, in the short term anything could happen." Once again, there was a marked disparity between bleak corporate news and positive economic news.

US trade deficit data highlighted robust demand for imported autos, food and consumer goods while US consumer price data showed inflation in the world's economic powerhouse remained subdued.

On Wall Street, the Dow Jones industrial average lost 3.27 per cent, the broader Standard & Poor's 500 Index was 2.52 per cent lower and the tech-laden Nasdaq Composite slipped 1.72 per cent.

Next week French telecom gear maker Alcatel, chip maker STMicroelectronics, drug giants AstraZeneca and Novartis, and banks HBOS and Hypovereinsbank, all present their results.