Europe's losses led by metals and miners

Finnish information technology firm Tietoenator boosted hope for a recovery in mergers and acquisitions after it received a €1.1 bn offer from Cidron Services, a unit of private equity firm Nordic Capital.

Tietoenator surged 40 per cent to €15.99 after rejecting the bid, saying it was too low. The approach drove gains in French IT companies Cap Gemini and Atos Origin on Thursday, but both stocks fell over the holiday-shortened week by 2.6 per cent to €33.01 and 3.9 per cent to €32.05 respectively.

It was a grim four days in the wider market, as sharp falls in gold and base metal prices tarnished metals and mining stocks and the credit problems showed no signs of abating, driving the pan-European FTSE Eurofirst?300 down 2.3 per cent to 1,226.67.

On Thursday, heightened risk aversion saw investors flee commodities for cash and bonds. This hit metals stocks as fears grew that a global economic slowdown would further damp demand for resources, dealers said.

France's Eramet, operator of the world's largest ferro­nickel plant, was the week's biggest faller, losing 17.9 per cent to €426.67 for the week.

In Germany, ThyssenA­Krupp fell 6.5 per cent to €34.06 and Salzgitter fell 9.8 per cent to €102.4, while in France, ArcelorMittal lost 5.3 per cent to €47.96 and steel tubemaker Vallourec fell 6.3 per cent to €147.12. B-shares in Sweden's SSAB tumbled 13.9 per cent to SKr146, and Austria's VoestA­alpine shed 5.2 per cent to €42.83.

There was no respite for the banking sector, as a profit warning from Credit Suisse on Thursday stoked fears that more problems lurk on banks' balance sheets in spite of better-than-expected results from US peers Goldman Sachs, Lehman Brothers and Morgan Stanley this week.

The Swiss bank said that, based on its latest estimates, it was unlikely to be profitable in the first quarter. Shares fell 1.9 per cent to SFr48.5, while arch-rival UBS, which was at the centre of the rumour mill this week after the collapse of Bear Stearns on Monday, lost 1.8 per cent to SFr27.92.

Speculation about liquidity problems dogged Anglo-Irish Bank at the start of the week, sending the stock skidding 4.3 per cent since Monday to €7.85, although the bank did manage to claw back lost ground, climbing 13.8 per cent on Thursday as the rumours subsided.

France's BNP Paribas swam against the tide, rising 8.9 per cent to €61.51 after it ruled out a bid for rival Societe Generale, which slid 10.8 per cent to €61.33.

In the telecommunications sector, both hardware companies and service providers fared badly.

The telecoms equipment maker Ericsson's B-shares tumbled 9.7 per cent to SKr10.88 after its mobile handset joint venture Sony Ericsson warned that first-half earnings could fall by up to half as the global consumer slowdown dented demand.

Telecom Italia, the debt-laden phone operator, fell 12.9 per cent to €1.21 on rumours of a capital increase to fund restructuring and efforts to combat declining earnings.

Meanwhile, a weak outlook at Deutsche Telekom drove the German operator's shares down 8.2 per cent to €10.48 as it said its fixed line business would come under pressure. Belgacom fell 11.5 per cent to €26.61 while Portugal Telecom fell 9.1 per cent to €6.89.

German carmakers ad­vanced after a report by Fitch saying they were better prepared to endure tough times for the auto sector. Volkswagen jumped 13.4 per cent to €178.25 while BMW added 6.3 per cent to €34.23.

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