Shares in Frankfurt were lower as concerns about the prospect for higher interest rates in the US and Europe outweighed gains by carmaker DaimlerChrysler after the group reported record profits for last year.
The Xetra Dax index finished 151.55 or 2 per cent lower at 7,587.13, having recoved from a low of 7,492.23. The market was also unsettled by Bundesbank council member Mr Franz-Christoph Zeitler, who warned that a speculative bubble might be emerging in German equities. Blue chips have climbed around 50 per cent since October.
DaimlerChrysler was one of the few blue-chip winners. It gained €1.60 to €67.40 after reporting a 28 per cent rise in 1999 operating profit.
Sportsware maker Adidas-Salomon put on €2.78 to €52.98 as investors built positions ahead of Thursday's results. Telecoms and technology stocks, this year's star performers, were among the day's casualties. Siemens fell €8.90 to €179.10 after its strong gains in recent weeks while software maker, SAP, down €23.90 at €865.10, also underperformed the market.
Paris ended lower as fears of rising US interest rates hit the Nasdaq and spilled over into French sentiment. The CAC 40 index fell 85.91 or 1.4 per cent to 6,102.73.
French technology companies lost ground. STMicroelectronics was down €6.20 to €203.10, Equant €5 to €116 and France Telecom €4.60 to €164.30. Broker downgrades hit a number of stocks.
Amsterdam closed lower in light trading as investors waited for clues from key US financial data due out later this week. The AEX index lost 8.02 to 654.54.
Milan sprinted ahead in early trade, establishing another intraday record high, before it, too, was hurt by the malaise affecting neighbouring markets. The Mibtel index swung between a high of 33,780 and a low of 32,925 before settling 219 lower on the day at 33,358.
Madrid was down nearly 2 per cent. Internet company Terra Net- works lost €7.15 to €132.60 after its 1999 results showed a widening loss of €172 million compared with €115 million for 1998 although this was in line with expectations.
Helsinki ended lower, hit by the Nasdaq's morning fall. The Hex general index lost 395.36 to 16,172.89.
