Paris shares close down

Share prices closed sharply lower, particularly among Dassault Systemes and other high-tech names as consolidation in the sector picked up pace this afternoon with a drifting performance by the Nasdaq composite, dealers said.

The CAC-40 index finished down 47.45 points at 4,568.09, on volume of 4.4 billion euro.

Among CAC-40 stocks, 8 closed higher, 30 closed lower and Michelin ended unchanged at 38.20.

On the Matif, January CAC-40 futures were trading 67 points lower at 4,560, while March 10-year French government bond futures were up 0.03 at 89.54.

Only a handful of stocks resisted the broad downtrend on the French market seen today, as investors reduced positions amid investor worries that hopes of renewed profit growth later this year are already fully priced in to current valuations, dealers said.

Heavy share issuance by several large European companies in recent sessions were also prompting investors to sell shares in order to absorb the new paper, they said.

Vivendi Universal was one example, having mandated Deutsche Bank and Goldman Sachs yesterday to sell 55 million of its own shares on the open market at around 60 euro each.

However, dealers said today that the 2 banks were being forced to offer the Vivendi Universal shares with additional discounts, since investors were unwilling to purchase all of the shares in the current market environment, particularly in the wake of reduced 2002 earnings forecasts from rival media giant AOL Time Warner overnight.

Vivendi Universal shares ended 0.40 euro lower at 58.80. Neither Deutsche Bank or Goldman Sachs were available to comment on reports that they lowered the share offering price to 59.20 euro or even less, nor that they had decided to retain part of the stake on their books.

Other TMT stocks were mostly lower, as investors perceived the market unwillingness to absorb the stake as an indication of reduced investor appetite for raising their exposure to new economy holdings, dealers said.

France Telecom fell 0.10 to 45.50, Alcatel was off 0.75 at 20.15, Dassault Systemes fell 2.40 or 4.3% to 53.10 and Orange slipped 0.21 to 10.20, while TF1 managed to edge 0.06 firmer to close at 30.05.

Among other cyclical issues, LVMH fell 1.40 to 47.25, hit by consolidation after having risen almost straight up from 43.62 euro seen on Dec 21, Saint-Gobain was down 0.30 at 174.70 and Peugeot was 0.20 lower at 46.60.

Financial stocks were broadly higher, benefiting from a sector upgrade to 'overweight' from 'neutral' by Credit Suisse First Boston, who also raised its ratings on BNP Paribas and Societe Generale to 'buy' from 'hold'.

BNP Paribas rose 0.20 to 102, Societe Generale was up 0.55 at 64.80 and Credit Lyonnais put on 0.10 to close at 37.94.

AGF moved 0.70 higher to 52.80, with Commerzbank raising its recommendation on the stock to 'accumulate' from 'hold' because of its current share price levels are at historical lows, while Axa slipped 0.41 to 23.99.

On the broader indices, the SBF-120 index closed down 31.24 points at 3,153.94 and the SBF-80 fell 26.36 to 3,594.70.

The euro stood at 0.8925/$30, little changed from 0.8929/$34 late yesterday.