LONDON, July 19: European share prices sank back towards recent low points on Friday, with investors rattled by events on Wall Street where shares fell sharply after a raft of earnings reports and fresh accounting concerns.

Troubled Swedish telecoms equipment group Ericsson led the decline after its forthcoming issue of new shares, designed to shore up its balance sheet, was priced at an unexpectedly steep discount to the current share price.

Across the 12-nation euro zone, the Euro Stoxx 50 index plunged 3.1 per cent to 2,761.2 points.

Meanwhile, the British FTSE 100 index tumbled 2.6 per cent to 4,186.4, the French CAC 40 index fell 2.7 per cent to 3,420.1 points, and the German DAX 30 index dropped 2.2 per cent to 4,009.9 points.

Earlier in Asia, Tokyo shares fell 2.8 per cent on Friday while the Hong Kong market declined 1.2 per cent.

Those losses followed heavy falls on Wall Street Thursday, where shares were hit by disappointing earnings numbers from a number of leading companies, which encouraged profit-taking following gains earlier in the week.

The Dow Jones Industrial Average fell 1.6 per cent while the tech-rich Nasdaq composite index fell 2.9 per cent, with futures markets indicating further losses when US markets opened later Friday.

A Washington Post report that America Online may have boosted advertising revenue between 2000 and 2002 through a series of what the paper called “unconventional” deals weighed on markets sensitive to any suspicion of irregular accounting practices following recent scandals.

Shares in Ericsson plunged 22 per cent to 11.3 kronor after the company set a price of 3.80 Swedish kronors per share for its 30 billion kronor rights issue, a 75-per cent discount to Thursday’s closing price.

While the company announced better-than-expected second quarter results it warned it may not return to profit until the end of next year.

Other leading European telecoms equipment stocks were hammered, with Nokia down 5.1 per cent at 13 euros, Alcatel diving 7.5 per cent to 6.66 euros, and Siemens stock off 3.3 per cent at 56.68 euros.

Vivendi Universal lost 3.7 per cent of its value to trade at 17.52 euros following news US investors had filed a lawsuit against the French media giant and Jean-Marie Messier, the company’s former chairman and chief executive officer.

But shares in British mortgage bank Abbey National bucked the weaker trend, rising 2.3 per cent to 713 pence after the resignation of chief executive Ian Harley.

The move sparked renewed speculation that the troubled British bank may be vulnerable to a bid from one of its rivals, with National Australia Bank rumoured to be a possible suitor.

NEW YORK: Battered stocks extended their slide here on Friday, as the Dow Jones industrial average tumbled briefly below its lows hit on September 21 widely viewed as a key “bottom” level.