Techs lead European stocks lower

Infineon Technologies (NYSE:IFX), the German chipmaker, fell 13.6 per cent to EU5.79 after its weak first-quarter results prompted a target price downgrade from Commerzbank.

Infineon's 77 per cent stake in the loss-making Qimonda, which it spun off in 2006, and mounting losses at its Com phone chip unit led it to a first-quarter group net loss of EU396m.

"Finding a way to reduce its stake in Qimonda would be necessary for us to become more positive on this share, " Commerzbank said in a research note.

Franco-Italian chipmaker STMicroelectronics (NYSE:STM) fell 4.4 per cent to EU8.01, and ASML (NASDAQ:ASML), the Dutch maker of chip-manufacturing equipment, lost 3.6 per cent to EU16.98.

The FTSE Eurofirst 300 ended down 1.8 per cent to 1,297.72, while Frankfurt's Xetra Dax shed 1.7 per cent to 6,733.72, the CAC 40 in Paris lost 1.9 per cent to 4,723.8 and London's FTSE 100 slid 2.6 per cent to 5,724.1.

Carmakers were lower after the European Central Bank's decision on to keep the eurozone's main refinancing rate at 4 per cent.

France's Renault was down 4.2 per cent to EU68.45, while domestic rival Peugeot shed 3.2 per cent to EU47.06. Germany's Porsche fell 4.5 per cent to EU1,088.99.

Wednesday's warning from solar energy group Renewable Energy Corp about possible cost overruns and delays continued to have a negative impact on the sector.

REC lost a further 4.8 per cent to NKr120, while German rival Q-Cells shed 8.3 per cent to EU55.95. German silicon wafer-maker Wacker Chemie dropped 5 per cent to EU132.11.

German solar panel maker Conergy, which fell 23.9 per cent on Wednesday after much worse-than-expected results, fell a further 18.2 per cent to EU10.76. Deutsche Bank (NYSE:DB) cut its rating on the stock from "hold" to "sell" and slashed its price target from EU25 to EU10.

Swedish bank SEB gained 1.1 per cent to SKr142.50 after reporting a forecast-beating 11.2 per cent rise in fourth-quarter operating profit thanks to strong trading revenues.

Meanwhile, Germany's Deutsche Bank rose 0.4 per cent to EU75.27 after pleasing results and a bright outlook that contained no subprime or credit market-related shocks. "The bank must be complemented on 'dodging the bullets' in 2007," analysts at Bear Stearns wrote in a note. However, the broker reiterated its "underperform" stance on the stock, citing uncertainty about the outlook for Deutsche's investment banking unit in 2008.