Trading in Frankfurt ran into technical difficulties in mid-afternoon as problems with the Xetra electronic trading platform effectively brought activity to a halt.
The market had hardly been heading anywhere before the breakdown, when the Xetra DAX index was just 3.70 easier at 7,427.00.
It remained quoted at this level at 5.30 p.m. as the exchange continued with attempts to restart trading.
On the Dax, a paucity of corporate news had left the market directionless.
Deutsche Telekom was one winner, however, gaining 67 cents to €61.35. Dealers said the rise was fuelled by a number of factors, including speculation about a move on the Wind telephone venture. Confirmation that it would realise a gain of about €2.3 billion from the sale of its stake to France Telecom and Italy's Enel came yesterday evening.
Chip-maker Infineon Technologies dropped €3.09 to €85.61 and technology company Epcos fell €2.62 to €122.98 after a number of European chipmakers reported profits. Dealers said the two companies had fallen prey to profit-taking on concerns that a favourable second quarter for profits might not be replicated into the current quarter.
Commerzbank extended its losses with a fall of €1.12 to €36.28 in further response to Monday's move by Germany's bank watchdog to block the voting rights of Cobra, the bank's largest shareholder with a 17 per cent stake.
In Paris the CAC-40 index closed 104.71 lower at 6,514.54 as US consumer price data revived fears of rising interest rates.
The worst losses were suffered by STMicroelectronics as a weak Nasdaq added to profit-taking pressure after the semiconductor maker announced strong half-year results. The share, which had shown a healthy increase on Monday, fell €4.50 to €67.50. France Telecom was off €5.00 at €153.90 ahead of last night's pricing of the IPO for its Wanadoo unit.
Alcatel fell €3.00 to €78.60 after setting a record high of €82.80 on Monday.
Vivendi's share price inched up €0.15 to €88.35 as sentiment improved towards the flotation of its utilities unit Vivendi Environnement. The retail tranche of the IPO, which was postponed last week owing to lack of investor interest, ended yesterday.
