(by Dr. Goldfinger)

European stocks fell today on technology shares. Nokia, STMicroelectronics NV and ASML led decline.

The Dow Jones Stoxx 50 fell 1.4 percent to 2594.13 as of 9:30 a.m. in London, with all of its 50 stocks declining. The Stoxx 600 slid 1.3 percent, with the benchmark’s technology group leading the drop. The Euro Stoxx 50, a benchmark for the 12 countries using the euro, shed 1.5 percent, on track for its biggest drop since May 10.

STMicroelectronics, Europe’s largest manufacturer of memory chips, matched expectations with second-quarter net profit which nearly doubled to $148m. The company revenue growth was broad-based and gross margins hit 37.4 per cent, up from 35.4 per cent a year earlier. But shares were down 2.4 per cent at €16.04.

Elsewhere in the chip sector, Infineon was down 3.4 per cent to €9.47, while ASML, the dutch maker of chip manufacturing equipment shed 3.9 per cent to €11.97.

Telecoms equipment makers also suffered after some strong performances in the previous session on the back of strong second-quarter results from Ericsson. A note of caution was sounded by some analysts on Thursday however: "Ericsson showed a clean pair of heels to its peers, but while management basks in the warmth of the turnaround, we expect this strong performance to continue into 2005, but to come to a halt in 2006 as market growth evaporates," said Richard Windsor at Nomura.

Shares in Ericsson were down 3.8 per cent to SKr20.50, Alcatel was down 3.8 per cent to €11.28 while Nokia slid 3.3 per cent to €9.66.

Thomson, the French maker of electronic goods, reported an unexpectedly large net loss in the first half, but the shares were up 4.4 per cent to €15.32 after it revealed a new strategic plan which will see Silver Lake, a US private equity partnership, take a stake in the company.

SAP, the German business software company, was down 2.8 per cent to €124.46 despite reporting that total software revenues rose 15 per cent in the second quarter, beating the numbers delivered earlier this month in the wake of profit warnings from sector rivals. The company said European revenues had stabilised, while its US business continued to be its biggest growth area.