The weakening dollar and Wall Street's depressed start sent Frankfurt lower as the recent euphoria over a spate of corporate restructurings both real and imagined began to wear off. The Xetra DAX index finished 133.07 or 2.6 per cent lower at 5,026.14.
Deutsche Bank lost 2.25 deutschmarks to DM104.65 after the group said it had sealed a takeover of US Bankers Trust in a $10.1 billion (£6.8 million) deal.
Analysts said the weakness reflected concerns that the price was a little too high and that the takeover would be financed through a partial capital increase.
Chemicals and pharmaceuticals group Hoechst dropped 3 per cent ahead of today's joint news conference with tie-up partner Rhone Poulenc. The Hoechst shares lost DM15 to DM72.50. Hoechst had risen since mid-October but slid on profit taking last week having reached a recent high of DM79.50 on November 23rd after confirmation of the merger talks.
Paris ended within a whisker of its low for the day with the CAC40 index off 107.5 at 3,843.38 after an active session.
France Telecom racked up turnover of 3.2 billion French francs, a fifth of total CAC-40 turnover and lost Ffr15 at Ffr395 after the price of the second tranche of shares to be sold by the government was set at Ffr390.
Amsterdam ended off 34.99 or 3.1 per cent at 1,100.61 on the AEX index. Severe profit-taking sent KLM down 9.7 per cent and ING and Philips each lost around 5 per cent.
Milan finished weaker on the heels of the weak start on Wall Street and the Mibtel index registered a loss of 560 at 22,374.
Madrid moved lower and the general index ended off 17.14 at 844.96. Telefonica slipped 150 pesetas to pta6,780 on competition worries with the deregulation of the Spanish telecoms market due to start from today.
