News of stronger-than-expected US retail sales, which fuelled concerns about higher interest rates, left bourses on the slide. The FTSE Eurobloc 100 index closed 7.17 or 0.6 per cent lower at 1,106.32. The FTSE Eurotop 100 fell 23.26 or 0.8 per cent to 2,994.08, while the broader FTSE Eurotop 300 settled 10.27 or 0.8 per cent down at 1,315.93.
Paris ended lower as negative sentiment continued to surround several key stocks. The CAC-40 index fell 19.39 or 0.4 per cent to 4,697.39.
Vivendi, the utilities and communications group, fell €2.60 or 3.6 per cent to €70 after further downgrades from brokers, adding to a 4.5 per cent dip on Monday. Michelin, the tyremaker, declined €1.20 or 2.6 per cent to €44.75 as it came under political pressure over its plan to slash thousands of jobs.
Frankfurt was lower, hurt by renewed US rate worries, and the Xetra DAX index closed down 45.44 at 5,401.47. DaimlerChrysler saw a sharp reversal in its fortunes on the first day of the Frankfurt motor show. The shares initially picked up to a high of €74.85 on confirmation that the group planned to invest €46 billion in new models by 2004, but they turned back to close 75 cents weaker at €72.
Porsche finished €30 ahead at €2,830, but off a high of €2,873, on its plans to match 1998-1999 earnings in 1999-2000. The other big carmakers were out of favour. BMW lost €1.16 to €30.09 as it said it expected nine-month BMW unit sales to rise 10 per cent, but Rover sales to fall 29 per cent. In the technology sector, SAP gave up €11.50 to €434.50 on profit-taking after the rise earlier in the month.
Milan saw lively action in the financial sector as the country's largest insurer, Generali, sprang a $12.7 billion (€12.2 billion) bid for its smaller rival Ina.
Shares in Ina, already involved in merger talks with Sanpaolo IMI, soared 7.4 per cent to €2.78 as Generali launched its hostile move. An attempt by Generali and Sanpaolo to divide up the spoils was said to have foundered earlier in the day.
Generali gave up 4.7 per cent to €30.10 while Sanpaolo put on 1.5 per cent to €12.50. Banco di Napoli, which Ina controls, closed 2.4 per cent higher at €1.56 while BNL, in which Ina has a 7 per cent stake, climbed 2.8 per cent to €3.40. Elsewhere, Pirelli slid 4.1 per cent to €2.30 after the cables and tyremaker's first-half net profit fell, in line with expectations, but marked by tough price competition.
Madrid fell after the release of data pointing to rising domestic inflation raised fears the government would impose price curbs on industry. The general index ended 10.56 or 1.2 per cent down at 879.27.
Helsinki saw further heavy losses in Raisio which tumbled 9.7 per cent to a six-month low of €6.65 on top of Monday's 18 per cent crash after the company issued a profits warning. The Hex index finished down 81.26 at 7,755.69, also hurt by a 1.9 per cent slide in Nokia to €84.56, as the telecoms group was hit by renewed worries over the interest rate outlook.
