Currency factors continued to weigh heavily on bourses. The FTSE Eurobloc 100 index was off 0.5 per cent at 1,079.73 and the FTSE Eurotop 100 index shed 0.5 per cent at 2,935.73. The broader FTSE Eurotop 300 index lost 0.6 per cent 1,287.50. Paris slid as automotive stocks fell on profit-taking. The CAC-40 ended 44.81 or 1 per cent lower at 4,568.12. Renault led the market lower as the shares declined €1.84 or 3.7 per cent to €47.80. Other stocks to suffer in the sector were Peugeot, which fell €4.70 or 2.5 per cent to €185.30, and Valeo, the parts maker, down €1.85 or 2.6 per cent at €68. Usinor, the steel group, rallied strongly from early losses to close 70 cents or 5.3 per cent higher at €13.90. TF1, the television company, climbed €21.40 or 8.4 per cent to €276.50 after it posted strong first-half results.

Oil stocks rebounded after OPEC decided to maintain production limits until next March. TotalFina advanced €1.60 or 1.4 per cent to €118.70, while Elf Aquitaine gained €2.90 or 1.7 per cent to reach €171.50.

Frankfurt ended 44.00 lower at 5,238.76 on the Xetra DAX index. Viag moved up against the trend, adding 17 cents at €20.30 on talk that the utility had crossed a political hurdle in its planned move to merge with Veba. Dresdner Bank was in demand, rising 89 cents to €46.50 amid speculation that Allianz was set to sell its stake in Dresdner. Deutsche Bank, seen as a potential buyer, shed 39 cents at €62.61. Thyssen Krupp fell 64 cents at €20.88 on industry concerns following heavy six months losses at French rival Usinor.

Amsterdam ended little changed with the AEX index off 0.61 at 564.13 on subdued volume. Hoogovens ran into a squall of selling after investors took fright at the six months results from French steel group Usinor. Hoogovens fell 5.5 per cent, sliding €3.00 to €51.25.

Milan outperformed its neighbours for a second consecutive day, driven by speculation about take-overs. The Mibtel index put on 35 to 24,180. Finmeccanica put on 3.2 per cent at 88 cents on press reports it had reached agreement with BAe on a defence joint venture and after the company said it would welcome France's Thomson-CSF in a three-way link-up.

Edison rose 2.1 per cent to 8.32 on reports of a possible merger with Telecom Italia. Telecom Italia rose 1.8 per cent to €9.16 while Olivetti was up 4.5 per cent at €2.31. Mediaset rose 4.3 per cent to €9 after Fininvest vice-chairman Ms Marina Berlusconi said the holding company expected its consolidated operating profit to more than double in 1999.

Oslo slipped as Christiania Bank fell again on worries that the government might block the $3.1 billion take-over bid by MeritaNordbanken. The Total index ended 9.2 or 0.7 per cent lower at 1,226.30.