News that UBS was selling its 25 per cent stake in Swiss Life to institutional investors sent the insurer crashing more than 7 per cent lower in Zurich. The shares fell 73 Swiss francs (€45.57) to SFr940 (€586.84) as the deal raised concerns about Swiss Life's prospects without the benefit of a strong partner.
UBS eased SFr3 (€1.87) to SFr446 (€278.44), although analysts said the deal would provide the bank with extra cash to fund growth. Most other financials closed weaker after early gains. CS Group fell SFr3 (€1.87) to SFr228 (€142.34) and Zurich Allied lost SFr9 (€5.62) to SFr957 (€597.45).
The broad market also turned weak in afternoon trade. The SMI index finished 38.9 lower at 6,942.7.
Frankfurt took fright at the euro's fresh lows against the dollar. Usually a strong US currency lifts German equities, but yesterday the Xetra DAX index slid 47.83 or 1 per cent at 4,823.26.
Selected blue chips came in for steady selling. Deutsche Bank shed €1.19 at €47.26, Allianz €7.8 at €270.10 and Volkswagen €1.42 at €62.10. Firm features took in Mannesmann, up €3.10 at €120.60, and Thyssen which rose €4.90 at €172.99 on news of a rise for flat steel prices.
Amsterdam experienced volatility at Wessanen which surged almost 10 per cent in early trading, rising to €11.90 on speculation that the foods group was set to announce links with a sector rival. A subsequent denial from Wessanen took some of the heat out of the situation and the stock closed up 15 cents at €11.
Unilever gained €1 at €65.10 ahead of next Tuesday's results statement and Akzo Nobel improved 45 cents to €36 in advance of figures due on Monday. The AEX index ended 5.4 higher at 517.63.
Paris surged 2.3 per cent after recovering from weakness in late trading. The CAC-40 rose 91.07 to 4,130.48.
Among the main movers was beverage group Pernod-Ricard, up €3.50 or 6.5 per cent to €57 on news that the French government may have reversed its opposition to the group's planned sale of Orangina to Coca-Cola of the US.
BNP was also strong, up €4.40 to €74.50 as traders thought it could play a pivotal role in the privatisation of Credit Lyonnais. cais, which posted strong results on Tuesday.
L'Oreal surged €35 to €610 in anticipation of its full-year results, coming up on Wednesday. Paribas, down a hefty €3.40 to €80.10, and Societe Generale, down €1.80 to €131.50, succumbed to doubts about the merits of their merger.
Milan saw Olivetti soaring 8.3 per cent on speculation that it was plotting a $578 million (€522 million) takeover of Telecom Italia.
