The chemicals and pharmaceuticals sector performed poorly, falling 2 per cent on the FTSE Eurotop index. Germany's Bayer fell another 4.2 per cent to €34.73.

The company said it was being sued by the family of a US man who died of kidney failure after taking Baycol, an anti-cholesterol drug which Bayer withdrew last week. Bayer has said 52 deaths have been linked to Baycol. Its shares have fallen 23 per cent since the withdrawal announcement.

Switzerland's speciality chemicals company Clariant tumbled 14.3 per cent to SFr35.55 after it announced that first-half income fell by a worse-than-expected 50 per cent. It announced another 1,000 job cuts and reported a goodwill writedown of SFr1.2 billion for last year's purchase of Britain's BTP.

ABN Amro cut the stock from "hold" to "reduce" and BNP Paribas cut from "outperform" to "neutral".

Pharmaceuticals group Roche also announced results for the first half, which were better than expected. But the company said full-year operating results would be no better than last year and the shares slipped 0.4 per cent to SFr130.50. WestLB Panmure upgraded the stock from "underperform" to "neutral", saying the main surprise was the return to modest sales growth.

Technology and telecommunications stocks were mostly lower.

The technology sector fell 3.3 per cent and the telecom sector 1.9 per cent. Nokia fell 6.7 per cent to €20.45.

Deutsche Telekom hit a new 3 1/2-year low of €18.84, a loss of 5.3 per cent, following the placing last week of 44 million shares by Deutsche Bank. Deutsche Telekom's US mobile phone unit Voice- Stream reported that operating losses for the three months to June 30th more than doubled compared with the same period of 2000. Deutsche Telekom took out full-page advertisements in German newspapers yesterday defending its performance and urging shareholders not to abandon the stock.