The Telegraph
Since 1st March, 1999
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Nikkei numbed to 18-year low, Wall Street winces

London, Sept. 3 (Reuters): European stocks fell on Tuesday morning amid fresh jitters that economic recovery was stalling, with Wall Street also set for an opening slide after Tokyo’s benchmark index hit an 18-year low.

The Nikkei finished 3.2 per cent lower at 9,217.04, falling below the previous year-to-date closing low of 9,420.85 marked in February. It was the lowest close since November 7, 1983, when the index closed at 9,216.21.

In early Tuesday trading, the Dow Jones industrial average tumbled 236 points, or 2.72 per cent, to 8,427. The Standard & Poor’s 500 index sagged 27 points, or 2.95 per cent, to 889, while the Nasdaq Composite fell 38 points, or 2.96 per cent, to 1,275.

Technology stocks led a tumble in European blue chips towards one-month lows by Tuesday midday amid concerns that the global economy will not sustain a recovery in corporate profits.

Sentiment was also battered by weaker US stock futures, signalling that a sharp opening fall on Wall Street loomed. There were also concerns that key US data out later on Tuesday will reinforce recent evidence that the world’s biggest economy is not recovering as quickly as hoped.

Meanwhile, fund managers pointed to a disappointing second-quarter reporting season from technology companies and warned it was unreasonable to expect a sharp recovery in earnings next year.

“Although analysts have slashed estimates in the past three months, forecasts still have some way to drop in 2003. We cannot rally convincingly until this happens,” said Robert Sellar, a European technology fund manager at Aberdeen Asset Management.

Sellar has about 30 million pounds under management. Swedish telecom equipment maker Ericsson was down 6 per cent, while French rival Alcatel shed 5.1 per cent. Both companies were thrown out of the Stoxx 50 index, which was recast on Monday night.

In pre-noon trading, the FTSE Eurotop 300 index was 2.2 per cent weaker at 917 points, its lowest level in nearly a month. The narrower DJ Euro Stoxx 50 index fell 2.2 per cent to 2,582 points.

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