Interest rate worries sap confidence of bourses

Shares in Frankfurt came off the boil as a fresh round of lows for the euro forced interest rate concerns back to the top of investors' agenda.

Sentiment was sapped further late in the session by a weak opening on Wall Street and, at the close, the Xetra DAX index was off 178.99 at 7,376.93.

Technology shares absorbed much of the profit-taking and led the activity charts. Siemens shed A6.40 to A163.10 and SAP A28.10 to A640.90. Deutsche Telekom came off A5.20 at A69.80 in 5.3 million shares traded.

Among weak financials, HypoVereinsbank eased 12 cents to A69.58 after the FTSE Eurobloc 100 index fell 1.8 per cent to 1,480.30 and the FTSE Eurotop 100 index 1.8 per cent to 3,824.00. The FTSE Eurotop 300 index shed 1.3 per cent to 1,646.28.

Dresdner Bank fell A2.12 to A43.05. Falling bond markets hit insurers, Allianz losing A10.10 to A422.50 and Munich Re A10 to A317.

Volkswagen and truck-maker MAN were firm features as investors sought out big exporters. Volkswagen gained A1.48 to A43.50 and MAN 99 cents to A35.80.

Paris pulled back off its record high, losing most of Tuesday's gains as leading technology and media shares tumbled. The CAC-40 index shed 1.9 per cent to 6,435.65.

Among TMTs, STMicroelectronics fell 3.8 per cent to A207.80 and Equant 3.8 per cent to A68.30. However, the biggest decliner in the CAC was the retailer, Casino, as investors pondered the implications of its bid for rival Monoprix. Casino lost 4.4 per cent or A4.40 to A96.

Monoprix's current parent, Galeries Lafayette, jumped 4 per cent to A194.50 on the broader market as it was seen as benefiting most from the deal. Trading in Monoprix was suspended.

Other retail shares were hit by news from the US of a downgrade by Goldman Sachs for top US retailers including Wal-Mart. Carrefour closed A2.90 lower at A68.30, a fall of 4.1 per cent.

Total Fina Elf fell 3.9 per cent to A160 after Goldman Sachs removed it from its European recommended list.

Madrid closed 1.7 per cent lower in widespread selling as Wall Street's doldrums continued to drain investor interest in Europe. The Ibex 35 fell 199.3 to 11,667.9, giving back half its gains of the previous day.