Planned changes to the way in which weightings are calculated for the Stoxx pan-European indices sent a number of blue chips sharply lower in Frankfurt.

Deutsche Telekom, which lost €2.43 to €56.07, was also bruised by concerns over US Senate concern to any plans the German group might have for a bid for Sprint after last week's US and European regulatory opposition to a bid by WorldCom.

The Stoxx changes, due to take effect on September 18th, will weight index component on the number of shares available to investors, rather than the number of shares in existence. The scheme will have a profound impact on Telekom, in which the German government still holds a stake of about 58 per cent.

The insurance sector was also hit by the planned changes. Munich Re fell €16.87 to €321.13 and Allianz was €14 lower at €364. Allianz and Munich Re each have a 25 per cent crossholding in the other.

Commerzbank gained 90 cents to 37.30 after reports in the Financial Times and FT Deutschland suggested that Commerzbank shareholders could expect a 45 per share offer from its merger talk partner, Dresdner Bank. Shares in Dresdner edged 15 cents higher to €42.45 after it denied the reports.

The technology sector was firmer with Siemens €5.91 higher at €168.90 and Epcos €2.75 ahead at €116.25.

Engineering and industrial gas group Linde jumped €1.61 to €44.87 but in very low volume by comparison with recent sessions. Investors looking for a cyclical play were said to be buyers of the stock.

At 5.30 p.m., the Xetra Dax index was barely changed, up 1.64 at 6,960.60.

Paris ended a little weaker with price movements dominated by the Stoxx index decision. The CAC 40 index fell 13.7 to 6,494.77.

France Telecom shed 3.8 per cent to €143.30 as changes to the way the Euro Stoxx 50 index is calculated suggested its weighting in the index could roughly halve. Sentiment was also hit by a report in Les Echos newspaper that France Telecom had lost €200 million in becoming France's leading Internet access provider.

Other shares hit by the Stoxx change included L'Oreal, down 3.6 per cent to €81.50, and retailer Pinault Printemps Redoute, which lost 3 per cent to €225.

On the other hand, Alcatel, Vivendi and Total Fina Elf stand to gain. Alcatel rose 3.1 per cent to €72.30 and Total Fina Elf 0.6 per cent to €165.90. Vivendi, which said its weighting would increase by more than 33 per cent, put on 2.2 per cent to €94.05.

The volatile telecoms company Equant continued to climb from its May low of 37, adding another 5.1 per cent to €47.80. Retailer Casino did even better, rising 6.4 per cent to €104.40.

Amsterdam gained support from some heavyweights with the AEX index rising 0.2 per cent to 669.62.

Philips Electronics gained 2.4 per cent to €51.25 on continued optimism that it will strengthen its position in mobile phones through an alliance with an Asian manufacturer. Royal Dutch added 1.2 per cent to €66.10, bucking the trend of weaker oils, as the Stoxx index changes were seen to benefit its shares.

Milan gave ground on a quiet day and the Mibtel index finished 61 lower at 31,874.

Seat Pagine Gialle extended Monday's 4 per cent gain, rising a further 3.8 per cent to €3.91. Telecom Italia fell 1.5 per cent to €14.13 but Tim edged up 0.2 per cent to €10.78.

Banking group Bipop extended Monday's recovery from last week's losses, rising 2.1 per cent to €8.69. Its purchase of Germany's Entrium Direct hit the shares last week as it was judged expensive even though analysts said the deal made strategic sense.

Oil group Eni fell 1.3 per cent to €6.12 after a downgrade by Dresdner Kleinwort Benson, which cut oil stocks in Europe to neutral from overweight.

Brussels focused on image technology company Agfa Gevaert, which extended its recent gains to 12 per cent over seven consecutive trading days.

The shares put on 2.8 per cent to €24.99 as a number of analysts set target prices of around 30. British funds were said to be strong buyers of the stock.

One analyst noted that the upturn began last week as small shareholders took the opportunity to sell off their positions as Agfa shares finally moved above the company's 22 issue price of its initial public offering in June 1999.

The Bel-20 index finished 0.82 higher at 2,955.46.

Madrid was 1.6 per cent higher on the blue chip index as heavyweight Telefonica rose another 3.6 per cent to €24.34.