Europe ended a volatile week on a subdued note with leading markets tracking the weak opening on Wall Street.

Frankfurt fell 1.7 per cent or 119.21 to 6,992.75 on the Xetra DAX index after the sellers swooped on market heavyweight Deutsche Telekom.

Rumours that Telekom had been telling analysts that profit estimates for this year were perhaps a tad on the high side sent the company's shares steeply lower. The stock fell €2.40 or 3.5 per cent to 66.85 after touching a session low of €65.10.

Other big fallers included BASF and Mannesmann. The former, a strong market recently on talk of a drugs disposal, came off €1.35 at €48.05. Mannesmann ran into profit-taking, losing €9.01 at €267 as investors waiting for an increased bid from Vodafone AirTouch ran out of patience.

Metro continued to rise as talk of a bid from US retailing giant Wal-Mart gave way to the prospect of a merger with Kingfisher of the UK. Although Metro denied it was talking to Kingfisher, the shares ended €1.01 better at €45.50 for a two-day advance of more than 10 per cent.

Paris ended lower with the CAC 40 index off 28.42 at 5,681.32. France Telecom was down €2.60 at €127.30 in line with the telecoms sector. LVMH fell €10.00 to €433 and Dior €5.10 to €239.90 in spite of Goldman Sachs raising its price targets for both of them.

But TotalFina, which has an index weighting of more than 9 per cent, was up €2.20 to €131.50 after oil prices hit fresh highs. ST Microelectronics, up €5.60 at €168.60, also lent support to the market.

Amsterdam eased back 3.32 to 641.47 on the AEX index with a fall of 2.8 per cent or €4.35 to €150.15 at Philips setting the tone for the session.

Chemicals were also weak. Akzo Nobel came off €1.40 at €45.60 and DSM €1.18 at €34. Office equipment group Buhrmann stayed firm, adding a further €1.75 to €21.75 as investors continued to warm to recent broker optimism on the stock.