Shares in Frankfurt overcame another nervous session for bonds to close up 21.56 at 6,912.81 on the Xetra Dax index. A two-year high for German bond yields and some negative euro-zone inflation news - the French CPI for December ticked up steeply - kept equities in the red for most of the day.

However, a solid start on Wall Street and a late rally by market heavyweight Deutsche Telekom combined to lift sentiment towards the close of trading. Deutsche Telekom rose €2.00 or 3 per cent to €68 after touching a session low of €64.

The FTSE Eurobloc 100 index shed 0.5 per cent at 1,324.10 but the FTSE Eurotop 100 index and the broader FTSE Eurotop 300 were little changed. The former ended at 3,476.47 and the Eurotop 300 at 1,512.21.

Tech stocks were mixed. Siemens ran up against profit-taking, slipping €1.33 at €124.18 but software leader SAP remained in demand, gaining €17.2 to €703.

Paris lost ground but ended well above the worst of the day, with gains at LVMH and Carrefour helping to underpin sentiment. The CAC40 index finished off 31.40 at 5,582.50 after a session low of 5,536.50.

Aided by an improved target price of €200 at Goldman Sachs, supermarkets leader Carrefour rose €6.20 or 4 per cent to €163. LVMH gained €18.80 to €426 amid hopes for a fresh burst of expansion from the luxury goods giant. Renault was also a good market, adding €2.10 at €51.90, while Schneider improved €1.20 at €75.05. Air Liquide rose €3.70 at €165.70.

Amsterdam fell a further 10.54 to 638.40 on the AEX index after another troubled session for the heavyweight financial stocks.

The financial leaders all fell more than 2 per cent as bond yields continued to edge higher. ABN came off 56 cents at €22.09 and Aegon €3.25 at €84.60. ING finished €1.81 lower at €56.29.

Helsinki ended lower, with the Hex general index closing off 108.43 at 13,591.95, a fall of close to 1 per cent.

Madrid under-performed most European bourses but a positive tone from Wall Street's broader indices gave a late lift to shares. The bluechip Ibex-35 index fell almost 1.5 per cent or 160.6 to 10,851.