Frankfurt DAX:

German shares closed clearly weaker, with the Dax down by 2 per cent on the day. The Xetra Dax, reflecting electronic trade, even slipped momentarily below 5,500 in late dealing, but closed at 5,528.12, down 86.65 or 1.54 per cent. It hit a low of 5,499 some 44 minutes before trading closed.

Siemens, Telkom, and Dresdner all fell more than 3 per cent, while Adidas dropped 5 per cent on a Merrill Lynch downgrade.

Schering dropped 7.6 per cent after revising a sales forecast due to the Asian crisis.

Paris CAC-40:

French shares closed slightly lower but well above the day's lows after Wall Street pulled Paris out of the pits. The blue chip index closed down 0.2 per cent, after climbing back from a low of 3,930.06. Volume amounted to a solid 15.5 billion francs, of which 13.5 billion was in blue chip shares. This included a 4.2 billion francs basket trade related to trades in the futures market. The software group, Cap Gemini, continued its rise on safe-haven buying as it is not heavily exposed in Asia or North America. Problems relating to the year 2000 and the introduction of the euro are set to boost earnings at Cap Gemini. It led the blue chip gainers with a rise of 6.32 per cent to 909 francs.

Milan Mibtel:

Italian shares closed lower, erasing earlier gains, tracking the Dow Jones as it see-sawed wildly. The all-share Mibtel index fell 0.33 per cent to 23,528, and the blue chip Mib30 dropped 0.4 per cent to 35,110. Olivetti shares were the most active, ending 0.51 per cent higher at 3,915 lire. Some analysts think the stock can climb still further on the back of strong earnings expectations for telecom units Omnitel and Infostrada, while others think the shares already reflect fundamentals. Along with long-term buying, the stock is being lifted by takeover speculation.