Steady selling of heavily weighted blue chips sent Frankfurt lower and unwound the gains built over the first two days of the week.
Within a dull banking sector, Deutsche Bank fell €1.74 to €83.65 with sentiment unsettled by weak bonds and a sagging euro. Commerzbank lost €1.19 at €38.50 and HypoVereinsbank 40 cents at €66.15.
Stock overhang concerns continued to gnaw away at Deutsche Telekom which shed a further €2.26 at €63.64. The shares are now 36 per cent below their March peaks.
DaimlerChrysler came off €1.20 at €55.73. Drugs group Schering fell €2.51 to €55.69 on news of potential UK controls on the use of a multiple sclerosis treatment. Retailer Karstadt Quelle, which put out a disappointing trading statement on Tuesday, tumbled €1.97 to €32.03 for a two-day decline of 17 per cent.
The Xetra DAX index was off 105.42 at 7,121.85 at 5.30 p.m. German time.
Paris lost 1 per cent, with 30 of the blue-chip stocks lower, but Vivendi and Canal Plus saw their share prices bottom out in the wake of the Seagram agreement.
Vivendi closed up 1.5 per cent at €89.45 in heavy volume, having started the day lower following CAI Cheuvreux downgrading it from a "buy" to a "sell". Canal Plus, which also traded heavily, ended just 10 cents lower at 178.50.
France Telecom spent the day more than 3 per cent down, closing €5.40 lower at €156.40. At its annual meeting the company said it would float shares this summer in a new grouping which will lump together all its online retail businesses. While traders said there were no surprises in this statement, sentiment was still hit. Another telecoms loser was Bouygues, which fell 3.4 per cent to €716 after announcing a €2.29 billion capital increase to help pay for a third-generation mobile phone licence.
The CAC-40 index fell 64.16 to 6,490.76.
Amsterdam gained 2.88 to 684.88 to send the AEX index up to within three points of its March all-time high. Chip enthusiasm lifted Philips and ASM Lithography after the former announced its chip operations expected second-quarter sales to expand by 50 per cent.
Zurich went the way of most of its neighbours although the SMI index recovered from an intra-day low of 7,732.0 to close 36.4 easier at 7,760.2.
