In Frankfurt, technology stocks succumbed to profit-taking and dragged the blue chip index lower. By 5.30 p.m. the Xetra DAX index had slipped 33.88 to 7,373.03 in thin volume of trade.
Shares in Deutsche Telekom were 37 cents lower at €60.62 amid speculation that the company was set to make a $35 billion-plus bid for VoiceStream Wireless, the US mobile phone group.
The worst casualty of profit-taking was software group SAP, which is due to announce first-half results today. Shares fell €6.22 to €219.21. Epcos slid €1.53 to €118.77, Infineon eased €1.72 to €83.20 and Siemens fell €4.20 to €175.80.
The automobile sector strengthened for the second day running after the encouraging earnings posted in the US by Ford and General Motors.
Volkswagen was €1.06 higher at €43.86. DaimlerChrysler was the most heavily traded blue chip as investors responded to rumours it was planning a US bid. At 5.30 p.m. it was €1.90 higher at €59.55.
Paris closed flat in spite of a promising debut by Wanadoo, the Internet offshoot of France Telecom. The CAC-40 index was just 0.3 per cent lower at 6,495.11.
Wanadoo closed at €21, a 10.5 per cent premium to its offer price of €19. However France Telecom fell 1.9 per cent to €151 as investors judged that the parent no longer had the benefit of the full Wanadoo stake.
Other Internet shares lost ground as money flowed into Wanadoo. LibertySurf closed 4.3 per cent lower at €33.50 and Multimania fell the same percentage to €17.50.
The other flotation in the news is today's Vivendi Environnement, which is expected to be priced at €34 and is estimated to be twice subscribed. Parent Vivendi rose 1.2 per cent to €89.40.
Amsterdam followed its neighbouring stock exchanges lower and tech stocks were held back by the Nasdaq's losses on Tuesday. The AEX index closed 3.25 down at 680.32.
Shares in Baan closed more than 6 per cent higher, up 16 cents at €2.77 after ING confirmed it would tender its 5 per cent stake in the software company to Invensys. Investors believed the move would aid the UK company in its bid to buy Baan. KPN was more than 7 per cent lower, off €3.34 at €42.87 after the telecommunications company announced it would issue new shares in the fourth quarter of the year, during which the Dutch government will sell part of its 44 per cent stake. The listing of KPN's mobile division has been postponed to 2001.
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