European confidence was badly dented by the continuing uncertainty over developments in Russia, where the communist-led parliament rejected President Boris Yeltsin's choice of prime minister, as well as by Wall Street's mid-morning pull-back.
Frankfurt closed a rocky session 2.3 per cent lower with the Xetra Dax index registering a loss of 114.52 at 4,811.28 by the close of electronic trade.
Vereinsbank lost 9.50 deutschmarks to DM134.50 ahead of today's official merger with HypoBank as investors registered their disappointment after the bank cautioned that it expected its risk provisions to be unchanged at DM2.5 billion this year.
Paris fell 50.86 to 3,658.11 on the CAC 40 index with the expiry of the leading futures contract adding to general uncertainty. Volume was again below average.
Thomson-CSF tumbled FFr10.50 to FFr193.90 and chips group STMicroelectronic shed FFr15 to FFr335.
Amsterdam ended lower in spite of a strong run for market heavyweight Royal Dutch following a fresh outbreak of speculation that the oil giant was set to mirror the recent BP-Amoco deal and merge with Texaco.
Royal Dutch, which stormed ahead to 193 florins in early trade, ended up Fl1.50 at Fl88.20 in 8.5 million shares traded after a denial from Texaco that the two were involved in talks. The US group described the rumours as "wild speculation".
Philips fell Fl4.50 to Fl129.80. Milan extended its losses as Wall Street pulled back and the Mibtel index finished 344 lower at 21,086, with banks leading the retreat on worries about their exposure to emerging markets.
Madrid had a steady session with the general index dipping 6.26 to 737.05. The banks supplied most of the underpinning thanks to a round of bargain hunting.
