Tech, telecom stocks send European shares down

By Eva Kuehnen

FRANKFURT, March 19 (Reuters) - Technology and telecom stocks dragged down European shares on Wednesday as a profit warning by Sony Ericsson and Deutsche Telekom's (DTEGn.DE: Quote, Profile, Research) outlook disappointed markets, while mining stocks fell.

The pan-European FTSEurofirst 300 index closed 0.9 percent lower at 1,230.28 points after a rocky session, hitting its intraday high at 1,255.77 and its low at 1,222.33.

The DJ Stoxx index of European telecoms shares fell 3.3 percent with Deutsche Telekom slipping 6.9 percent as an update by Europe's largest telecoms group for its fixed-line unit was perceived by the market as a profit warning.

The company however confirmed its overall guidance.

Ericsson (ERICb.ST: Quote, Profile, Research) fell 7.8 percent after its mobile phone handset joint venture Sony Ericsson cautioned first-quarter earnings could fall by more than half. The world's top mobile phone maker Nokia (NOK1V.HE: Quote, Profile, Research) slipped 5.9 percent.

The FTSEurofirst 300 index is down about 18 percent so far this year, and is on track to record its worst quarterly performance since the third quarter of 2002, as stock markets around the world are hit by worries over the prospect of a U.S. recession and the impact of the global credit crisis.

The U.S. Federal Reserve on Tuesday slashed U.S. interest rates by a hefty three-quarters of a percentage point to 2.25 percent, lifting U.S. and Asian stock markets overnight.

But euphoria wore off in European trading as news of Sony Ericsson's profit warning broke and speculation about further subprime casualties among European banks swirled.