Shares in Frankfurt ended a low-volume session with the Xetra DAX index off 74.13 at 7,195.15.

Brokers said investors were loath to open fresh positions ahead of today's interest rate decision by the US central bank. Bonds were stable and the euro rallied, but turnover remained stuck firmly in low gear.

Deutsche Telekom racked up one of the heaviest losses amid continuing stock overhang concerns in the run-up to next month's sale of government-owned shares. It fell €3.09 or 4.8 per cent to €62.01. Preussag initially spurted to €43.95 on confirmation of an agreed bid for Thomson Travel, the UK's biggest package holiday group.

However, by the close the stock was off €2.51 at €40.99 amid speculation that Preussag was teeing up a rights issue to finance the Thomson deal plus acquisitions in the US.

Paris ended lower as the focus remained on US factors, with new figures suggesting the need for tighter US monetary policy beyond a possible 50 basis point interest rate rise today. The CAC 40 index fell 0.9 per cent or 57 to 6,392.27.

Network services company Equant slid 8.4 per cent to a 12-month low, adding to last week's 14 per cent tumble.

Amsterdam saw steady selling of selected tech stocks. Baan fell heavily on negative weekend press comment while disappointing results hit UPC.

Baan, the troubled business software group, fell 19 cents or 8.1 per cent to €2.16. Cable group UPC shed €2.65 at €34 following a first-quarter results statement.

KPN, the telecoms leader which this month failed to merge with Telefonica, came off €1.70 at €106.65 after Goldman Sachs cut its target price to €115 from €140.

The AEX index finished off 1.24 at 667.06.

Zurich edged back late in the session and the SMI index, which had closed at highs for the year in the previous two sessions, finished 13.8 easier at 7,722.9.