(updating with full report)
STOCKHOLM (Thomson Financial) - Stockholm shares closed sharply lower led by another plunge from Ericsson, with investor confidence apparently broken after its conference in New York yesterday, and after Goldman Sachs and Societe Generale downgraded the share.
The OMX Stockholm index closed down 2.03 pct at 339.84, while the OMX Stockholm 30 finished 1.66 pct lower at 1,059.07. Turnover amounted to 34.583 bln skr.
Ericsson B closed down 8.14 pct at 14.68 skr in the wake of the company's announcement yesterday in New York that among other things it expects fourth quarter sales to come in at the lower end of its 53-60 bln skr guidance range.
Goldman Sachs removed Ericsson from its Conviction Buy List and downgraded it to 'neutral' from 'buy'.
'Given Ericsson's deteriorating Q4 revenue outlook and the growing probability that the wireless infrastructure market will decline again in 2008 we are downgrading the stock and cutting our 12-month price target to 17 skr from 22 skr,' Goldman Sachs said in a note.
Societe Generale downgraded Ericsson to 'hold' from 'buy', and cut its DCF-based target price to 17 skr from 25 skr.
'We believe that lower sales will have a significant impact on margins,' said Societe Generale in a note.
WestLB however upgraded Ericsson to 'buy' from 'hold' saying the New York briefing triggered stock price meltdown.
'We think the sharp stock price decline is overdone and we upgrade the stock on valuation grounds. We concede that investors need to look beyond 2008 sales and earnings to appreciate the fundamental value of the company. There can be no doubt in our view that mobile data upgrades will come,' West LB said in a note.
Among the telecom operators, TeliaSonera closed down 1.63 pct at 60.25, and Tele2 B down 1.45 pct at 136.25.
Elsewhere in the market, weakness on Wall Street following the release of the lowest US consumer confidence in two years led to an extension of earlier losses.
Miners had another torrid session hit by fears over lower base metal prices. Boliden closed down 5.06 pct at 84.50 and Lundin Mining down 3.67 pct at 59.00.
The banks were all lower, with Nordea closing down 1.14 pct at 103.80, Skandinaviska Enskilda Banken A down 1.80 pct at 164.00 and Svenska Handelsbanken A down 1.29 pct at 191.50.
Citigroup has upped its stance on Handelsbanken to 'hold' from 'sell', noting that the group's sale of its SPP unit to Storebrand is now on track.
The engineers closed mixed, largely holding on to their strong gains yesterday. Sandvik closed up 0.22 pct at 116.25, SKF B down 0.46 pct at 109.00, Alfa Laval down 0.88 pct at 393.00, and Atlas Copco A up 0.51 pct at 98.00.
Among other shares heavily traded, Volvo B closed up 0.73 pct at 103.25, Hennes & Mauritz B up 0.63 pct at 401.50, SSAB A down 5.36 pct at 159.00, SCA B up 0.22 pct at 111.75, and Scania B down 2.51 pct at 136.00. TFN.Stockholm@thomson.com sjr/rfw/sjr/lht COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2007 AFX News
