Shares in Milan stumbled lower in thin trade, lacking a lead from neighbouring markets, and with investors who tendered Telecom Italia shares to Olivetti facing a wait for payment of at least three weeks.

The real-time Mibtel index finished near its low for the day, down 200 at 24,550, also under pressure from a slew of 88 shares going ex-dividend.

Telecom Italia, up 6 per cent in early trade, turned south to close 3.1 per cent weaker at €9.39. Analysts said early optimism was prompted by relief that the Olivetti victory did not appear to have triggered a battle for control. But the upbeat mood soon gave way to uncertainties over valuations and investors were given further pause for thought as Merrill Lynch cut its recommendation on the Telecom shares. Olivetti picked up 2 per cent to €3.45.

Elsewhere, Lazio finished 6 per cent lower at €5.88, having weakened almost 10 per cent at one stage after the team lost the Serie A football championship to AC Milan after leading the league for much of the season.

Madrid edged back on a day of very low volumes. The general index fell 2.76 or 0.3 per cent to 901.78.

The decline was largely due to a drop in the price of Telefonica, the stock with the biggest market capitalisation, which ended 84 cents or 1.8 per cent lower at €46.85.

The company had outperformed the market earlier in the day on news that Olivetti had won control of Telecom Italia.

Sol Melia, the hotel group, continued its strong run of recent sessions, closing 95 cents or 2.4 per cent higher at €41.05 on optimism about the prospects for the Spanish tourism industry. The stock has gained 29 per cent since the close on April 22nd.

Moscow closed with comfortable gains, boosted by local investors responding to what they saw as an improvement in the political and economic climate. The RTS-I index finished 3.434 higher at 101.597.

Athens drew back as industrial and construction stocks fell sharply. The general index ended 24.19 or 0.6 per cent lower at 4,182.57.

Markets were closed in Amsterdam, Brussels, Copenhagen, Frankfurt, Oslo, Paris, Stockholm, Vienna and Zurich. Europe had a quiet day, with many markets closed for the Whit Monday holiday. The FTSE Eurobloc 100 index closed 2.51 or 0.2 per cent lower at 1,068.58.

The FTSE Eurotop 100 fell 17.06 or 0.6 per cent to 2,973.03, while the broader FTSE Eurotop 300 settled 6.23 or 0.5 per cent lower at 1,289.94.