Nokia drags Euro shares down

LONDON: European share indexes fell to a seven-week low yesterday, dragged down by mobile phone giant Nokia, which cut its profit margin forecasts, and by a weak financial sector.

The pan-European FTSEurofirst 300 index fell 0.26% to 1,425.35 points in its fifth consecutive session in negative territory.

Around Europe London??™s FTSE 100 index was down 0.4%, the French CAC-40 fell 0.05%, while Germany??™s DAX was down 0.26%.

Markets had briefly fallen even more strongly on a drop in US durable good orders, but pared most losses in the last two hours of trading after Wall Street rebounded. By 1712 GMT, the Dow Jones industrial average index was flat.

"This kind of volatility will continue in the short term until we know where the US economy and markets are heading," said Heinz-Gerd Sonnenschein, a strategist at Postbank.

"I don??™t see a positive trigger right now since the earnings season is over and companies will give their next corporate update only in January," he said.

Among few notable movers Finland??™s Nokia fell 1.4% after the world??™s top cellphone maker lowered its operating margin target for the next few years and predicted the global mobile phone market would slow in 2007.

German software firm SAP fell 1.4% after Goldman Sachs placed 1.3mn shares, according to a market source. Traders said the firm also got hit by a strong euro because it has a large exposure to dollar revenues.

Italy??™s biggest insurer Generali temporarily gained 3% on takeover speculation but slipped back in the afternoon.

Among the few gainers AstraZeneca rose 0.6% after Pfizer terminated its collaboration with Akzo Nobel on schizophrenia drug asenapine, a potential competitor to the Anglo-Swedish group??™s second biggest-seller Seroquel.

Barclays Plc, British third-biggest bank, fell 1.7% after it said bad debts would continue to rise, and insurer Old Mutual lost 5.9% as its nine-month operating profit missed market forecasts.

Despite the losses the FTSEurofirst 300 index is still up almost 12% so far this year.

In the UK merger and acquisition activity remained a key focus, with Spain??™s Iberdrola making an agreed offer worth a total of 777 pence a share for Scottish Power, slightly less than market expectations. Scottish Power??™s shares shed 0.8% to close around 739 pence.

The dollar briefly hit fresh 20-month lows against the euro yesterday after a poor set of US durable goods orders figures raised the chances that the Federal Reserve would cut US interest rates early next year.

The European single currency reached $1.3182 ??“ the highest point since March, 2005. It also struck a record ??152.89.

The euro later stood at $1.3161 in late European trading compared with $1.3131 in New York late on Monday.

The dollar rose to ??116.16 from ??116.05 late on Monday.

On the London Bullion Market, the price of gold fell to $637 per ounce, from $638.75 late on Monday. ??“ Agencies