Profit-taking after last week's sharp gains sent Frankfurt down almost 2 per cent and the Xetra DAX index closed 104.04 lower at 5,266.47.
Banks led the retreat. Dresdner Bank fell #1.50 to #41.60 after its chief executive was reported as saying that the group's 1998 profit from investment banking fell about 25 per cent. The weakness spilled over to the rest of the sector, leaving Commerzbank #1.10 lower at #27.40 and Deutsche Bank #1.22 down at #55.60.
Metro, the world's second largest retailer, which reached an all-time high of #78.50 last Thursday, fell #4.04 to #67.70 after WestLB cut its rating on the stock, saying new accounting rules had underlined the low earnings power of German retailers. Karstadt was marked #7 lower to #423 in sympathy.
Software giant SAP made an early attempt to rally after last week's 15 per cent fall following disappointing 1998 results. Paris consolidated after quickly abandoning all hopes of an early rally. By the close, the CAC-40 index had risen 43.52 to 4,201.90.
Alcatel was a big loser, down #8.70 to #115, hit by talk of a link-up in the US of Lucent and Ascend, which would provide a competitive setback for the French group.
Construction group Saint-Gobain sank #5.10 to #128.40 as it sought to play down media reports highlighting radioactivity in its glass wool products. Levels were well below European regulatory limits, the group said.
Michelin rose #2.30 to #34.30, driven by consolidation hopes in the European motor industry. Renault was another winner, putting on 76 cents to #42.07.
Milan fell in line with other European markets as investors took profits on a day of low volumes.
The Mibtel index lost 523 or 2.1 per cent to close at 24,655, compared with its closing level of 25,292 on Tuesday last week.
Fiat shed #1.7 per cent after Volvo, the Swedish car maker, announced the two companies were in talks. Alitalia, the airline, rose against the trend after it announced that KLM, the Dutch airline with which it has a co-operation arrangement, had held talks on extending operational agreements with US carriers. Alitalia ended 7.1 cents or 2.1 per cent higher at #3.45.
Amsterdam fell sharply as financial stocks performed poorly. The AEX index opened 1.1 per cent up, but ended 13.50 or 2.4 per cent down at 545.77. Fortis, the financial group, fell #2.15 or 5.8 per cent to #35.20 after announcing it planned to issue more shares to raise money for acquisitions.
(# signifies the euro)
