European bourses moved steeply lower, rattled by deepening concerns about the trend of interest rates ahead of next week's meeting of the Federal Reserve policy making committee.
The FTSE Eurobloc 100 index fell 0.9 per cent to 1,093.94. The FTSE Eurotop 100 came off 1.1 per cent at 3,070.72 and the broader FTSE Eurotop 300 lost 1.2 per cent at 1,328.82.
Frankfurt moved lower in sympathy with the bond markets, slipping 69.56 or 1.3 per cent to 5,399.11 on the Xetra Dax index in above average trading volumes.
Financials were in the firing line. Deutsche Bank fell €1.08 at €56.18. Munich Re lost €4.55 at €185.65. Motor shares were hit by worries about recycling costs, BMW's bigger than expected investment package for its UK Rover operations and mooted take-over bids for Scania and Volvo. At the close Volkswagen, said to be teeing up a Scania offer, was off €2.48 at €63.12 and BMW €20.10 at €686. DaimlerChrysler, the subject of Volvo deal speculation, gave up 45 cents at €85.80.
Leading utilities held up, helped by speculation that the recent talks between the industry and the government over the phasing out of nuclear power had proved useful. RWE added 70 cents at €42.90 and Veba 81 cents at €56.20. Chemicals group Degussa-Huels was the day's heaviest casualty, sliding €1.70 or 4.1 per cent, at €39.50.
Paris ended down, pulled lower by the combined force of worries about US interest rates and profit-taking on the last day of the monthly account. The CAC-40 index closed 56.38, or 1.2 per cent, lower at 4,481.66.
STMicroelectronics, the semiconductor manufacturer, was the biggest loser on the CAC, diving €4.80, or 7.1 per cent, to €62.50 on rumours that France Telecom might sell part of its stake in the company.
Madrid ended almost flat as sharp gains for Repsol, the oil group, offset losses elsewhere. Repsol reached a record close of €20.25, up 75 cents or 3.8 per cent, after it said it was certain of acquiring at least 62 per cent of the equity of YPF, the subject of an agreed $13.4 billion bid.
The general index finished 1.26, or 0.1 per cent, lower at 916.07.
Amsterdam ran into steady selling of financials on interest rate concerns and the AEX index ended off 5.78 at 571.90. ABN Amro traded 7 million shares and lost 45 cents, or 2.1 per cent, at €21.15 in the process. Aegon came off €1.30 at €78.70 and Fortis €1.05 at €30.25.
The media sector stayed weak as investors continued to unwind some of the recent gains built up on take-over speculation. Wolters Kluwer fell €1.75 at €39.80 and Elsevier 20 cents at €11.60.
