Another strong day for defence conglomerate Thomson-CSF helped lift Paris on a dull day generally for European stock markets. The CAC-40 index ended up 51.56 at 3,942.66.

Thomson-CSF continued to climb amid merger speculation following Tuesday's confirmation that GEC of Britain was in talks with a range of companies, including CSF. The shares gained a further 14 francs to Ffr240 for a two-day rise of 8.5 per cent.

BNP stood out within a mixed banking sector, adding Ffr20.20 to Ffr460.20. Sanofi led the losers' list, slipping Ffr20 to Ffr920.

Amsterdam reversed early gains. At the opening bell, the AEX index broke above 1,200 for the first time since August but fell back in later trading to close off 8.29 at 1,186.38.

Financials led the way down. ING lost 2.60 guilders at Fl114.50 and ABN-Amro fell to Fl39.50. Aegon, one of the best- performing stocks in global terms this year, closed on a sour note, dipping Fl3.50 to Fl230.60. Steel leader Hoogovens was the day's main casualty, down Fl2 to Fl52.

Frankfurt ended 49.63 lower at 5,006.57 on the Xetra DAX index. Deutsche Telekom continued to suffer from competition concerns following the announcement earlier this week of planned tariff cuts. The shares lost 1.09 deutschmarks at DM54.88 for a net decline in three days of 2 per cent. Mannesmann came off DM4.80 at DM193.

Zurich ended a subdued, shortened session marginally lower. The SMI index lost 42.3 to end at 7,160.7, 14.3 per cent higher than at the start of 1998.

Defensive stocks performed solidly on a day that featured a degree of profit-taking from other types of stock. Swisscom, the telecoms company, rose one franc to Sfr575, while Nestle, the foods group, finished Sfr32 or 1.1 per cent higher at Sfr2,990.