Frankfurt and Paris edge backwards

Xetra DAX: 4718.34 (-1.4); CAC-40: 3601.57 (-20.28)Frankfurt was lower, with the Xetra Dax dropping 67.42 or 1.4 per cent to 4,718.34.

RWE, the utility, took a lead from Viag with a fall of 3.70 deutschmarks to DM84.50.

Chemicals groups were mostly weaker with BASF down DM1.64 to DM63.55.

DaimlerChrysler eased DM1.60 to DM139.30 on the first day of official trade in the post-merger company's shares.

Paris was weak at the end of a subdued session and the CAC-40 index stood 20.28 lower at 3,601.57.

Engineering group Alstom dropped 9.50 French francs or 6.3 per cent to Ffr141.50 after the company forecast 1998-99 profits at the lower end of expectations and warned of a slowdown in orders.

Among financials, Axa put on Ffr25 to Ffr657 following a press report that the company was considering a bid for British insurer Guardian Royal Exchange. Both companies declined to comment.

Amsterdam edged lower in quiet trading, with the AEX index down 3.51 to 1,055.33.

Many of the leading financials were lower, with ABN Amro down 0.50 guilders or 1.3 per cent to fl37.90 on its acquisition of Brazil's Banco do Estado de Pernambuco SA-Bandepe for about fl290 million (£139 million).

Milan retreated with the Mibtel falling 85 to 20,919.

Banks were actively traded, with Banca Intesa up 146 lira to l8,971 and Banca di Roma down l96 to l2,837.

Telecom Italia fell l48 to l12,757 but found support on heightening expectation that ENI's chief executive would be named as Telecom's chief executive.

Madrid closed marginally lower as investors remained sidelined, and the general index fell 5.44 or 0.7 per cent to 794.29.