Frankfurt DAX: 2,543 (-16.52)

German shares dropped yesterday after the closely watched Ifo business climate index jumped in July, undermining hopes for a cut in Germany's securities repurchase rate today.

Prices had taken an instant dip after the early morning Ifo index report showed a rise to 94.1 in July from June's 90.4, far exceeding expectations and indicating a level of business confidence that could stall any German rate cut.

Paris CAC-40: 2,000.64 (-18.62)

French shares closed sharply lower yesterday due to a weaker franc amid evaporating hopes of a German rate cut. But the market managed to remain above the 2,000 level and kept some of Tuesday's gains.

Milan Mibtel: 9,598 (+5)

Italian shares recovered in afternoon trading to eliminate earlier losses yesterday as the market looked forward to some good news from a string of preliminary inflation data from six Italian cities later today.