Concerns about financial instability in Asia, Russia and Brazil, combined with higher yields in the bond market, sent Frankfurt to a lower close. The pullback reversed early gains that greeted the setback for Chancellor Mr Gerhard Schroder's Social Democrats in Sunday's Hesse state election.
The Xetra DAX index, which peaked at 5,174.25 early in the day, closed 45.04 lower at 5,052.44.
BMW soared €57.49 or 8.6 per cent to €726.49 as investors registered a positive response to Friday's boardroom changes. The stock saw upgrades from Goldman Sachs and Deutsche Bank Equities, while Lehman Brothers put a break-up value of at least 1,380 per share on the carmaker, and repeated a buy recommendation.
Industrial group Metallgesellschaft shot up 14.7 per cent after the group posted double-figure profit growth for 1997-98 and announced plans to take a near 75 per cent stake in the Gea engineering group. Metallgesellschaft rose €2.30 to €18 and Gea €3 to €27 .
Pharmaceuticals group Schering turned back from a high of €125.99 to close €2.64 lower at €120.86 as profit-taking took hold after the group announced preliminary 1998 results.
Sports brand group Adidas-Salomon put on €2.70 to €82.60, adding to Friday's 8.5 per cent surge in response to results and a forecast of a robust earnings increase.
Amsterdam shed 6.12 to 528.24 on the AEX index in spite of a 1.1 per cent advance by market heavyweight Royal Dutch.
The oil giant rose 45 cents to €40.10, boosted by the group's plans for an €8.5 billion expansion of the Nigerian oil industry and with sentiment gaining ahead of Thursday's results statement.
ING and Akzo Nobel were given a mixed reception after their inclusion in Salomon Smith Barney's list of European best picks. ING gave up €1 at €50.70 but Akzo ended all square at €36.35 after a high of €36.90.
Paris ended little changed after a weak Wall Street put a late damper on an initial bout of optimism.
Strong automobile and cyclical stocks had helped lift the CAC 40 to an intra-day high of 4,187.66 before the index slipped back to 4154.02, up 6.72.
Among stocks to benefit from fresh take-over news, Accor gained €15.9 or 8.4 per cent to €205 after it said it would buy 65 per cent of tour operator Frantour from state-controlled SNCF.
Alcatel defied the downward trend in telecoms following news that a planned link-up with Motorola would add €1 billion to sales over four years. The stock gained €3.90 to €96.70.
Renault, up €1.40 to €44.50, and Peugeot, up €1.50 to €136, benefited from the sacking of BMW's chairman, which, analysts said, made it a potential bid target.
