A savage 6.5 per cent shake-out in Frankfurt for heavyweight Deutsche Telekom was the main reason for a decline of 27.15 to 6,474.92 in the Xetra DAX index.

Telekom ran up against accelerated profit-taking, sliding €4.25 to €61 to extend its decline this week to 14 per cent. Mannesmann lost €6.90 at €210.10.

Banks stayed in favour. Deutsche Bank added €2.25 at €82.50 while Dresdner Bank gained a further €1.24 at €54.34 amid residual talk of merger plans.

Siemens shed €1.40 at €113.10 in spite of broker optimism, notably an earnings upgrade at Deutsche Bank that lifted its target price to €140.

Paris bounced gently off its 5,389 session low to close with the CAC-40 index down 29.59 at 5,450.11.

Most market heavyweights stayed weak. France Telecom shed a further €2 at €116 and luxury goods group LVMH came off €4.40 at €384. Carrefour, the supermarkets leader, lost €2.80 at €161. Air Liquide found itself at the centre of investors' search for "value stocks". The shares, one of the duller performers of 1999, gained €11.50 or 7.2 per cent to €171.5.

Foods group Danone also came in for buying, adding €16 at €236 as did motor giant Renault which gained €3.25 at €50.95. Amsterdam continued to slip back. The profit-takers kept their sights firmly on tech-related stocks and the AEX index ended 8.10 lower at 624.21. Philips fell €7.70 or 5.8 per cent at €124.85 and telecoms leader KPN came off €4.75 at €80.40 in the wake of the weak start in New York for the Nasdaq composite index.

Zurich rebounded after losing 5.4 per cent over the previous two trading days.

The SMI index climbed 99.3 or 1.4 per cent to 7,280.6.

Milan was mired in negative territory as investors took profits in telecoms and technology stocks and with market movements exaggerated by low volume trade on the Epiphany public holiday. The Mibtel index slid 409 or 1.5 per cent to 26,439.