Shares in Frankfurt fell for the third day running amid deepening concerns about the outlook for interest rates. The Xetra Dax index ended at low for the session, off 122.35 at 6,809.64.

The FTSE Eurobloc 100 index lost 1.5 per cent at 1,325.49 and the FTSE Eurotop 100 index came off 1.8 per cent at 3,442.66. The FTSE Eurotop 300 index shed 1.8 per cent at 1,496.99. German financials were again on the rack, notably the banks. Deutsche Bank lost €2.20 at €78.40 and Dresdner €1.75 at €51.90. HypoVereinsbank fell €4.28 or 6.5 per cent at €62.10. Among insurers, Allianz shed €13.50 at €333.5.

Deutsche Telekom added €1.61 at €66.01 as the market heavyweight provided further details of the planned flotation of its cellular business, but elsewhere in the sector Mannesmann met with sustained selling.

Mannesmann fell €7.55 to $258.60 as hopes for a bidding auction showed signs of fading after Vodafone AirTouch claimed to be confident of a 60 per cent positive response to its offer. Siemens rose €1.35 to €142 amid further positive comment from brokers. Deutsche Bank increased earnings forecasts and lifted its target price to €140.

Paris lost 93.36 at 5,597.50 on the CAC 40 index with retailer Pinault-Printemps leading the way down in heavy trading volumes.

Pinault tumbled €20.60 or 9.3 per cent to €201.9 in turnover of €232 million following a disappointing trading statement which showed revenues on the group's mail order side to be running below expectations.

Conglomerate Vivendi jumped €3.55 or 4 per cent to €91.70 after the company was said to have called off co-operation talks with Mannesmann of Germany.

Amsterdam ended 5.50 lower at 640.03 on the AEX index. Royal Dutch came off €1.00 at €59.56 and Unilever 73 cents at €49.87. Philips continued to improve, adding €1.80 at €155.20.

Milan was a loser in line with its neighbours and the Mibtel index fell 574 to 28,191.