Frankfurt DAX: 4196.53 (-30.78) Germany's IBIS DAX index fell over two per cent in late afternoon trade as the Dow Jones stumbled ahead of the weekend, but German shares pulled back some losses later on.

Dealers said the German index seemed set to remain under pressure in the near-term.

Paris CAC-40: 2876.69 (-81.90) French shares ended sharply lower but off their lows yesterday as investors feared that the new Socialist-led government would raise taxes on corporations on Monday.

Milan Mibtel: 14541 (-284) Italian shares slipped back to a lower close yesterday after touching record highs as Wall Street showed sharp losses in the afternoon.