Dec. 9 (Bloomberg) -- European stocks fell. Technology stocks including ASML Holding NV and Infineon Technologies AG paced declines after two U.S. chipmakers cut their sales forecasts for this quarter.

The change in forecasts ``tells us demand will slow in coming months,'' said Kilian de Kertanguy, a fund manager at Cholet-Dupont Gestion in Paris, which oversees the equivalent of $1.47 billion. ``There's little chance of short-term growth.''

De Kertanguy, who has been adding to his holdings of Suez SA and PagesJaunes SA, has avoided the semiconductor industry for the past six months.

The Dow Jones Stoxx 600 Index fell 0.3 percent to 248.23 as of 10:16 a.m. in London, with 16 of its 18 industry groups falling. The Stoxx 50 Index lost 0.2 percent and the Euro Stoxx 50, a measure for the 12 countries sharing the euro, also declined 0.2 percent.

Benchmark indexes fell in 12 out of 18 Western European markets. France's CAC 40 Index fell 0.1 percent, the DAX Index fell 0.5 percent in Germany and the U.K.'s FTSE 100 Index added 0.1 percent. December futures on the Euro Stoxx 50 declined 0.6 percent.

Xilinx Inc. and Altera Corp., the world's largest makers of programmable chips, said sales will decline more than expected this quarter. The forecasts came a day after Texas Instruments Inc. said its customers are continuing to reduce their chip inventory.

ASML, Europe's largest maker of semiconductor equipment, dropped 2.5 percent to 11.84 euros. Infineon, the region's second- biggest chipmaker, dropped 1.7 percent to 8.18 euros. The technology group was the biggest decliner on the Stoxx 600.

Veolia, Vivendi

Veolia Environnement SA , the world's biggest water company, climbed 3.5 percent to 24.80 euros after Vivendi Universal SA said it will sell a 15 percent stake in the company, prompting speculation that Veolia may get a takeover approach.

Vivendi, owner of the world's largest music company, added 1.6 percent to 22.93 euros. The stake Vivendi's selling is worth about 1.5 billion euros ($2 billion) at current market prices.

``Veolia has no controlling shareholder,'' said Jacques- Antoine Bretteil, who manages $522 million at International Capital Gestion in Paris and owns shares in both companies. ``Now they are effectively a takeover target.''

Shares of financial-services companies fell, led by Euronext NV, Europe's second-largest stock exchange by market value, after it posted lower-than-expected earnings.

Euronext declined 2.8 percent to 22.95 euros after saying net income fell 34 percent from a year earlier to 22.4 million euros as the company cut its stake in Clearnet SA and revenue from stock and derivatives trading declined. That compares with expected profit of 22.7 million euros, the median estimate of three analysts surveyed by Bloomberg News.

German Production

Industrial production in Germany, Europe's largest economy, probably rose in October for the third month in four, amid signs that an export-led recovery may have helped revive domestic demand, a survey of economists showed. The production report will be released by the Economics and Labor Ministry at noon in Berlin.

The Bank of England will probably leave its benchmark interest rate unchanged at a three-year high of 4.75 percent today on expectations economic growth may pick up in the fourth quarter, according to all 40 economists surveyed by Bloomberg on Dec. 3. The central bank will announce its decision at noon in London.

Royal Bank of Scotland Group Plc, the U.K.'s second-largest bank by assets, gained 1.5 percent to 1,668 pence. The lender said pretax earnings may rise 10 percent this year, matching analysts' expectations, buoyed by acquisitions and higher lending to companies and home buyers. The lender is ``confident'' of meeting analysts' estimates.

Tate & Lyle

Tate & Lyle Plc, Europe's biggest sugar-cane refiner, dropped 5.3 percent to 450 pence after saying its biggest shareholder, Compagnie Industrielle et Financiere des Produits Amylaces SA, sold its entire 10 percent stake for 218 million pounds ($418 million). Some 48.35 million shares were sold at 450 pence apiece, Tate said today.

Tate & Lyle will join the FTSE 100 Index after its shares surged 50 percent in the past year, FTSE Group said after the close of trading yesterday.

Air France-KLM Group, Europe's biggest airline, fell 1.6 percent to 14.31 euros, a fourth day of declines. France will sell a 17.7 percent stake in the carrier, sale managers Societe Generale SA and ABN Amro Rothschild said. The holding is worth about 693 million euros at current market prices.

The state, which currently holds 44 percent of Paris-based Air France, will own 18 to 20 percent of the company after the sale, the banks said.

To contact the reporter on this story: Brian McGee in London at bmcgee3@bloomberg.net.

Last Updated: December 9, 2004 05:20 EST