The leads coming out of Wall Street, still largely in holiday mood, were limited yesterday and European markets ended the week more or less where they began it. The FTSE Eurotop 300 index showed little net change.

Alitalia stood out strongly against the dull overall trend, as investors made early attempts to celebrate the airline's promotion to a fully fledged private sector company.

The stock shot ahead as speculation hardened that the Italian government was set to dilute its stake to fewer than 20 per cent from the present controlling 53 per cent under a radical restructuring package.

The plan, which Alitalia hopes will propel the airline back to profit in 2003, will see a combination disposals and bond financing package transform the group balance sheet by providing fresh funds of more than €1.5 billion.

The prospect of a much bigger free share float sparked talk of fresh equity partners and even the possibility of takeover bids. Alitalia jumped to €1.28 before subsiding to €1.14 in late trading, up 5.4 per cent for a two-day gain of more than 10 per cent.

Crude oil prices had another volatile day, as did oil equities, with leading stocks falling heavily in opening trade - only to rally late in the session.

With worries about a price war between the big producers back on the agenda following far smaller-than-expected output cuts from Russia, crude prices fell back under $19 a barrel, while leading stocks slid lower.

Royal Dutch ended off 0.3 per cent at €56.65, after a session low of €54.80. TotalFinaElf shed 0.3 per cent at €149.50, and Repsol 0.6 per cent, at €16.10. In late trading, Eni was off 1 per cent at 13.45.

Telecoms group KPN, buoyed by hopes that its debt problems can be successfully surmounted, stayed firm. The stock surged 6.9 per cent to €5.87.