Frankfurt unwinds gains in selling of leaders

European markets continued the pattern of rotation set up in recent weeks with Frankfurt unwinding Tuesday's gains on broad selling of leading stocks.

In an otherwise weak banking sector, Deutsche Bank added €3.52 at €101.72, but the broad thrust of financial stocks was downwards. Allianz lost 21 cents at €388.26 and Commerzbank fell 30 cents at €37.70. Negative broker comment sent Dresdner Bank down 81 cents at €53.41.

Lufthansa shed €1.09 at €24.91 as worries about spiralling fuel costs marred a strong first-half results statement from the airline.

Technology stocks ended weakly, tracking the slow start for the Nasdaq. Siemens fell €1.65 at €173.45 and SAP €6.40 at €259.60. Infineon lost €2.69 or 3.6 per cent at €72.75.

At 5.30 p.m. German time, the Xetra DAX index was down 44.37 at 7,204.83.

Paris relinquished early gains in midday trading, but narrowed its losses towards the close when the CAC-40 of leading shares was down 12.01 at 6,501.7.

The uncertainty was symbolised by a fluctuating performance from France Telecom, which closed up €1.60 at €123.90. A late rally saved it from a fifth successive setback after concern about the cost of third-generation mobile phone licences had held it back.

Thomson Multimedia suffered a miserable debut as a CAC-40 stock. The consumer electronic manufacturer fell €3.50 to €74 as the excitement surrounding its promotion to the blue-chip index subsided. Investors found a safe haven in Total Fina Elf, which rose €3.50 to €177 on strong interim figures and rising crude prices.

Amsterdam ended little changed with the AEX index off 0.59 at 695.44 after another bad day for KPN.

The telecommunications leader, weakened badly as a result of the high prices paid for the German mobile phone licences, fell 85 cents to a fresh low for the year of €29.35. The shares' four-day decline was extended to 14 per cent.

Fuel cost worries reappeared at KLM, sending the shares down €1 to €29. Among international stocks, Philips fell €1.75 to €52, but Royal Dutch added €1.78 at €71.56. Zurich was lifted by robust first-half figures from Nestle, which sent the SMI index back to a high for the year, up 59.6 at 8,377.0.