Hi-tech shares in the US took another nosedive yesterday as investors feared further earnings disappointments.

The technology driven Nasdaq composite index fell almost 3%, or 95 points, to 3,133 at one stage yesterday, touching the year low reached only last week. The Dow Jones industrial average remained steady as investors sought the stability of blue chip shares.

Nasdaq's fall knocked European hi-tech shares - on the Paris bourse, Alcatel closed down €3.90 or 5.24% at €70.50; meanwhile in London Bookham Technology ended as the biggest FTSE 100 loser, down 274p to £21.50. The Techmark, the City's index of technology stocks, fell nearly 3% to close 3355.78.

Yesterday's Nasdaq decline follows a fall of almost 6% on Wednesday. The index is down more than 30 % since reaching 5,132 in March, before investors lost faith in almost all internet-related companies.

Larry Wachtel, an analyst at Prudential Securities, said that few hi-tech shares remained unaffected by the crisis in confidence. "You have destroyed all the sacred cows. You started with the dot.coms, then the PCs, then wireless and now it's fiberoptics. You have pounded that down, so there is no place to hide."

Shares in fibreoptics companies were among the hardest hit yesterday as this week's profits warning from Nortel Networks, the huge Canadian telecoms group, continued to reverberate across the once popular hi-tech sector.

JDS Uniphase, which receives about 20% of its revenues from Nortel, fell before its quarterly earnings announcement late last night. At one point yesterday shares in the fibreoptic equipment supplier were down 10 % at $64.