Successfully riding out an early squall for banks, Frankfurt ended with the benchmark Xetra DAX index marginally higher at 4,569.73, up 5.61.
Deutsche Bank fell steeply at the opening, following the announcement of what brokers saw as disappointing third-quarter figures. As a result, the market's initial tone looked distinctly nervous.
But shares in the banking giant eventually clawed back from a low of 98.20 deutschmarks to close 50 pfennigs better at DM102.05 in good two-way volume. Sector balance was partly restored by BHF-Bank, which gained DM2.35 to DM60.75 after hints of a higher dividend and news of share buy-back plans offset heavier risk provisions.
But there were other pockets of positive news. Hoechst jumped DM4.83 to DM68.20 on the $2 billion (£1.3 billion) sale of its paints unit, with the day's trading further enlivened by rumours that the German chemicals leader was teeing up a merger with Rhone- Poulenc of France.
Paris edged lower as a fresh blast of Asian worries swirled around the banks, sending Paribas down 5.10 francs at Ffr389.8 and Societe Generale Ffr10 at Ffr725.
The recent upbeat performance by US technology stocks helped lift STMicroelectronics Ffr15.90 to Ffr334.90. Synthelabo and Sanofi, said by a French press report to be in merger talks, jumped Ffr75 to Ffr1,095 and Ffr41 to Ffr842 respectively.
RhonePoulenc added Ffr15 at Ffr252, helped by solid nine-month results and talk of the company casting around for a merger partner. Alcatel continued to improve, hardening Ffr41 at Ffr614. The CAC-40 index ended off 10.17 at 3,483.43 in dull volumes.
Amsterdam ended 2.68 lower at 972.70 on the AEX index with a five guilder decline to Fl97.80 at Philips and a 70 cents fall to Fl34 for ABN Amro offsetting a number of good gains elsewhere.
Milan fluctuated in a narrow range with the Mibtel index edging down 11 to 19,553. Olivetti rose 155 lire or 4 per cent to L3,930 after its chief executive Mr Roberto Colaninno reiterated that the group would post a fullyear profit. Fiat, which has a large exposure to Brazil, fell L164 to L4,580 ahead of the late release of the group's nine-month results.
Madrid saw marginal support from banks and utilities, and closed higher with the general index up 1.13 to 750.39. In spite of the rise, investors remained nervous over Brazil's fiscal deficit.
Of the banks, Banco Santander, reported a 25 per cent rise in ninemonth earnings and rose 10 pesetas to Pta2,460, while BCH rose Pta35 to Pta1,495. However, Banco Bilbao Vizcaya, the most active issue of the day, fell Pta30 to Pta1,780.
