Frankfurt takes cover from unstable euro

Investors in Frankfurt ran for cover as the euro continued to wobble on the foreign exchanges and equities fell back for the fourth day running. Technology stocks moved sharply amid a widespread sell-off for blue chips. Epcos fell €4.92 at €103.54 and Siemens €5.60 at €173.75. Infineon shed €3.21 at €63.92 and SAP tumbled €8.60 to €272.40 for a four-day decline of almost 10 per cent.

Deutsche Bank held steady, but financials generally remained out of favour ahead of today's meeting of the European Central Bank monetary committee, which must decide where euro-zone interest rates go from here.

Oil price driven cost concerns undermined a number of selected stocks. Lufthansa fell €1.04 at €22.54 and steel leader Thyssen Krupp came off 42 cents at €16.88.

At 5.30 p.m. German time, the Xetra DAX index was 126.42 or 1.8 per cent lower at 7,009.33.

The firmest feature on an otherwise deeply soured day was SAP Systems Integration, the latest software based business to come to the Neuer Markt. The stock shot up to a high of €53 before slipping back to €42.90. The flotation price was €19.

Paris was undermined by a lacklustre start on US markets and weakness across the board including technology stocks, financials and cyclicals. By the end of the session, there were 33 declining stocks on the CAC 40 index, which lost almost 2 per cent. France Telecom lost 4.7 per cent to €126.40 and Alcatel fell the same percentage to €83.80.

The only bright spot was the cosmetics group L'Oreal, which rose 2.4 per cent to €77.85 after reporting healthy first-half results.

The CAC 40 index closed 128.9 lower at 6,568.89.

Amsterdam eased 4.96 lower at 677.35 on the AEX index after another unhappy session for technology-related shares.

Cable TV leader UPC tumbled €1.40 or 5.1 per cent to €26.10 and ASM Lithography lost €1.57 at €40.98. Blue chips lost ground with Royal Dutch down €1.66 at €72.57 and top financial Aegon off 59 cents at €41.76. Brewer Heineken shed €1.45 at €58.50.

Milan was down 1.1 per cent to 32,712 on the Mibtel index as investors focused on a raft of results.

Energy company Eni fell 0.8 per cent to €6.56 after it posted first-half consolidated net profit up 119 per cent and Olivetti fell 1.4 per cent to €3.50 after a first-half loss at its parent company but said it expected a return to profitability for the full year.