Frankfurt investors quiet ahead of Fed meeting

Shares in Frankfurt passed an uneventful session with most investors staying quiet ahead of today's interest rate decision by the Federal Reserve.

Modest initial gains were quickly erased as the telecommunications sector picked up where it left off last week disturbed by the high cost of licences for the third generation of German mobile phones.

Deutsche Telekom, one of the few leaders to experience acceptable levels of volume, sank to a fresh low for the year, sliding €2.15 to €43.88 in 6.7 million shares traded. Mobilcom lost €1.30 at €107.70.

Interest rate nerves continued to dog insurers. Allianz lost €3.19 at €376.50 and Munich Re €2.80 at €321.

Volkswagen was a firm feature with the automobile giant's shares adding €1.35 at €49.75. Utility E.On improved 72 cents to €57.72 on heightened alliance speculation.

By 5.30 p.m. German time, the Xetra DAX index was off 23.94 at 7,208.48.

Paris also fell back as the sellers continued to pick out telecoms and luxury goods shares.

France Telecom, which backed Mobilcom in its bid for a German mobile phone licence, fell €2.60 to €126.40. Bouygues lost €1.50 at €66 in sympathy.

LVMH, hit hard last week by a broker downgrade for the luxury goods sector, lost a further €2.85 at €89.75.

Worries that it might be drawn into an expensive auction for German utility E.On sent Suez Lyonnaise des Eaux down €6.10 to €181.60.

The CAC-40 index ended 22.72 lower at 6,571.63 in seasonally low trading volumes.

Amsterdam ended little changed after a session dominated by option-trading as investors sought to position themselves at the start of the new contract.

KPN continued to suffer from last week's news that it had succeeded with its German mobile phone bid, but lost a consortium partner in the process. The shares fell €2.74 to €31.25 in 19.6 million traded for a two-session decline of almost 14 per cent.

The AEX index ended off 0.30 at 693.45.