On a day when most leading bourses lost ground, Paris saw new technology stocks spark a rally after two days of broad losses.

France Telecom, which has been a volatile stock since its 25 per cent surge last week, gained 2.5 per cent or #4.60 to #190.80 on the back of the rise by British Telecom. Network services provider Equant rose 8.8 per cent or #9.70 to #120 on rumours of a takeover by Deutsche Telekom.

Cap Gemini, despite a downgrade by Donaldson Lufkin & Jenrette, rose another 9.4 per cent or #29.20 to a fresh high of #339. Canal Plus, suspended limit-up, rose 12.8 per cent or #38.50 to #340 on rumoured upward revaluation tied to its Internet prospects.

Frankfurt ended lower on the Xetra DAX index as investors locked in profits on bank stocks. Both Deutsche Bank and Dresdner Bank fell heavily amid concerns that the planned alliance between the two banking groups would produce fewer cost savings than had been originally hoped.

Deutsche Bank fell #11.90 or 12.9 per cent to #80.81 in 11 million shares traded, while Dresdner Bank, which jumped 20 per cent on Tuesday when indications of the link first filtered into the press, shed 5.96 or 10.7 per cent at #50.

Commerzbank continued to push higher as talk of wider consolidation in the sector came to the conclusion that Commerzbank was foremost in the sights of potential predators. The shares added a further #2.01 at #44.01.

Munich Re added #17 at #315 but Allianz, which is taking over the fund management operations of the merging banks, fell back, slipping #4 at #407.

Amsterdam shed #6.66 to #668.09 on the AEX index after profit-taking at Philips and oil giant Royal Dutch. Philips came off #6.25 or 3.1 per cent at #196.80 while Royal Dutch, boosted lately by the strength of international oil prices, slipped #1.10 at #57.70.