Shares in Frankfurt edged lower for the second day this week with chemicals hit by switching within the sector and weak bond and currency markets hitting financials.
Financials stayed in the doldrums ahead of tomorrow's meeting of the European Central Bank monetary committee, which is widely expected to culminate in a rise for interest rates.
Insurance and banking shares lost ground. Commerzbank shed 31 cents at €36.53 and HypoVereinsbank 57 cents at €65.70. Allianz came off €1.70 at €387.30.
In chemicals, Bayer lost 85 cents at €47.45 and BASF 27 cents at €42.53 as sentiment in the sector swung behind Dutch leader Akzo Nobel. Henkel gave up 55 cents at €71.44 and Schering €1.82 at €60.60. Motor sector recall concerns unsettled Volkswagen, sending the shares down €2.31 at €48.79.
Firm features included engineer Linde, which jumped €1.64 or 3.5 per cent to €48.50 following an increase in target price to 60 at Deutsche Bank. Karstadt Quelle drove up €1.15 to €34.90 as investors continued to digest Monday's trading statement from the retailer.
The Xetra Dax index was 49.22 lower at 7,290.00 at 5.30 p.m. German time.
Amsterdam gave up 4.24 at 691.36 on the AEX index with a 4.1 per cent or 1.31 decline to 30.89 at telecoms leader KPN ahead of today's results statement.
Akzo Nobel jumped 5.8 per cent in spite of a downgrade from "buy" to "hold" at Fortis Bank. The shares added €2.80 at €51.35 as sentiment swung upwards ahead of today's scientific conference.
The Paris bourse ended modestly higher as technology and media stocks continued to climb while cybergame makers scored big. The CAC-40 was up 0.29 per cent at 6,633.99 points, up 18.97.
"The market is again trying to do better but can't really do so with the ECB meeting on Thursday," an analyst said, noting that the CAC-40 ended below near-term resistance at 6,640 points.
As on Monday, pay broadcasting group Canal Plus and its main shareholder Vivendi, involved in a three-way merger with Canada's Seagram, were the biggest CAC-40 gainers.
Traders cited renewed interest by portfolio managers returning from their summer vacations in the two stocks that are about 50 per cent below their year's highs.
