European stock markets closed lower Tuesday after Swedish telecom giant Ericsson shocked investors with a drastic profit warning. Inflation concerns added to the negative sentiment as the cost of oil continued to surge higher.
Ericsson said third-quarter profit and margins would be sharply lower than anticipated because of the reluctance of consumers to upgrade their mobile phones.
The company lost about a quarter of its value by the end of the session, down 23.8 percent, and dragged Sweden's benchmark OMX index lower by 3.7 percent at the close.
The technology sector plumeted by 5.4 percent.
The Frankfurt DAX and the Paris CAC-40 also closed lower, while shares of Northern Rock ended at the top of London's FTSE-100 index. Adam Applegarth, CEO of the troubled mortgage lender, and chairman Mike Ridley faced questioning from British Members of Parliament on the handling of the group's downfall. Shares closed 3.4% higher, having been lower for most of the session.
The banking sector closed 1 percent lower, tracking gloom in Asia and the U.S. and with plans to create a fund to unfreeze the securitized debt market still failing to boost investors confidence.
Switzerland's SMI also opened lower after pharmaceutical company Roche reported earnings that missed expectations.
Energy stocks were 0.8 percent higher, as New York light crude futures pushed above $87 a barrel amid worries of poor winter fuel supplies and tensions between Turkey and Iraq, sending energy stocks higher. Utilities were also trading 0.6 percent higher.