European equity markets took a switchback ride. Share prices opened sharply lower because of Intel's profit warning, pulled back when the G7 announced intervention to support the euro and lost ground again after the US Nasdaq market opened weaker. By the close, however, most bourses were well off their afternoon lows.

Frankfurt came to the view that early losses in its technology sector had been overdone. By 5.30 p.m. local time, the Xetra DAX index was registering a gain of 40.29 at 6,723.21, up from an earlier low of 6,468.46.

Infineon Technologies was still a heavy loser, closing €3.25, or 5.6 per cent, lower at €55.30, while parent company Siemens finished €8.71 down at €149.99.

Components maker Epcos fell €3.75 to €93.75 while, in the Neuer Markt, T-Online extended its slide with a loss of 64 cents at €23.95 .

The chemicals sector benefited from slightly easier oil prices. Henkel put on €4.60 to €70.60 while Bayer gained €2.05 to €43.35 and Degussa Huels added €1.93 at €31.10 .

Utility Eon jumped €1.95 to €56.25 on news that the group plans to buy back up to 10 per cent of its shares over the next nine months.

Paris ended flat, having spent most of the day in the red, after the euro intervention lifted sentiment. While technology stocks tended to be the losers in the wake of the Intel profit warning, their falls by the end of the day were relatively small.

The CAC-40 index gained just €3.81, less than 0.1 per cent, to 6,258.58, with gainers and losers equally balanced in heavy trade. Over the week, it has lost 5.4 per cent.

The Intel effect was apparent in the volatile performance of chipmaker STMicroelectronics. Its shares were down 10 per cent at one point, but ended just 3 per cent lower at €59.15.

Telecoms stocks remained weak, with France Telecom losing 1.3 per cent to €115 and Bouygues off 4.7 per cent at €57.10. Alcatel improved 1 per cent to €79.30 after heavy losses earlier in the week.

The best risers were cosmetics group L'Oreal, which gained 6 per cent to €86, Renault, up 5.6 per cent to €48.30, and food group Danone, which added 5 per cent to €161. Pharmaceuticals company Sanofi-Synthelabo also rose 5 per cent, to €57.50.

Amsterdam closed lower for the 14th session in a row, but had pared losses considerably by the end. The AEX index lost 0.5 per cent to 652.96, having been as low as 632.72.