Market Report - Europe

Frankfurt DAX: Frankfurt stocks suffered a substantial setback as the DAX index finished the official session at 5186.23 points against 5,229.8 at the official close on Wednesday. The DAX had slipped a slight 0.04 per cent on Wednesday. The Xetra DAX, which reflects after-hours electronic trading, was down almost 1.9 per cent at the close.

Operators said the DAX was pulled down by dollar weakness and drops on Asian markets; buying Daim- ler-Benz after the merger deal with Chrysler did not reverse the weak market trend.

Daimler-Benz surged but fell back from its record high of 217 deutschmarks - the previous record high was DM198. The weaker dollar hit other motor companies, with BMW in particular sharply lower.

Paris CAC-40: The Paris Bourse put on a puny performance as the CAC-40 index gave up 1.04 per cent to end at 3906.36 points as investors got ready for a three-day weekend thanks to V-E day being celebrated today. Operators said that all European share markets had come in for some profit-taking in the wake of Wall Street's 1.02 per cent plunge on Wednesday. Dealers emphasised the volatility of the market, with not many orders for stock and wide spreads. The motor sector saw contrasting fortunes after the announcement of the Daimler-Chrysler merger, with Renault falling by over 2 per cent while Peugeot went the opposite direction, adding 2 per cent.

Milan Mibtel: Milan stocks took a lighter hit as the Mibtel index gave up 219 points or 0.92 per cent on the day to end at 23,517 points. Traders said there were negative signals from other financial markets and from a Wall Street drop in Wednesday. Most leading shares were lower. Telecom Italian fell over 2 per cent ahead of a possible boardroom reshuffle but Fiat bucked the trend, rising almost 3 per cent on enthusiasm over consolidation in the motor sector. Eni dropped 1.9 per cent while Finmeccanica was almost 5 per cent lower.