Investors take time out to cash in on the euro

Investors sold heavily in Amsterdam where the AEX index was suspended limit-down briefly after falling 5 per cent below its high for the session. The index ended 22.58, or 3.9 per cent lower, at 561.08.

Analysts said shareholders were cashing in on the 8.4 per cent rise in the index since Monday's launch of trading in euros. "It's a little bit of profit-taking," said Mr Roel Gooskens, an analyst for HSBC Securities. "The stocks that made the most gains in the last few days fell the most today."

Frankfurt turned back after its 8.7 per cent rise over the previous three sessions and the Xetra Dax index closed 97.19, or 1.8 per cent, off at 5,345.71. Most large-cap stocks were marked down, and sharp falls were seen among some of the smaller blue chips. Chemical group Henkel lost 5.50 to 75.51, engineering group Linde was 39 lower at 466 and machinery maker MAN gave up 18.90 to 230.

Schering managed a 50 cent advance to 112, kept afloat by last week's bullish outlook for 1999. Software giant SAP put on 6.75 to 347.75 in a continuation of the rebound after Tuesday's 15 per cent results-inspired tumble.

Dresdner Bank, the sole winner among financials, edged 48 cents higher to 40 after Tuesday's news that the bank had spun off 25 billion deutschmarks (12.78 billion) of non-bank shareholdings into a separate company.

Car stocks were weak after their recent speculative advances. BMW lost 18 to 722, while DaimlerChrysler was 1.21 weaker at 91.30.

Paris ran out of steam as profit-taking was exacerbated by Wall Street's weak opening and the CAC-40 index closed 64.15, or 1.5 per cent, lower at 4,230.67.

Budapest opened strongly on its first trading day of the year with the Bux index shooting up 465.35, or 7.4 per cent, to 6,773.02. The rise was in line with expectations as the market caught up with its neighbours.

Madrid failed to sustain a bright start as investors sold strong-performing blue-chip stocks. The general index opened more than 2 per cent higher, but ended 15.58, or 1.7 per cent lower, at 915.97. Trading volume was a record 2.1 billion. Banks mostly ended lower, halting at least temporarily a surge that began last October. Banco Santander came off 1.22, or 6.8 per cent, to 16.84.

Stockholm advanced on a quiet day dominated by Volvo and Ericsson. Volvo was the second-most heavily traded stock after a report that the group was thinking of selling its car division. It finished SKr8.50, or 4.0 per cent, higher, at SKr220.50.

Ericsson, the busiest stock, continued to rally from the low it plumbed after a profits warning in December. The shares, at SKr174.50 at the close on December 18th, rose SKr6, or 2.9 per cent, to SKr216.