The impact of the Brazilian crisis took a further toll on Frankfurt which fell sharply late in the day as Wall Street made a weak start. The Xetra Dax index, which rallied to an intraday 5,093.66, turned back to close 79.37 lower at 4,902.75.
Banks, heavily sold on Wednesday, were hard hit again. Deutsche Bank tumbled #3.09 to #46.91, Dresdner Bank #1.85 to #34.45 and Commerzbank 78 cents to #25.12.
The motor sector was mostly weaker, but DaimlerChrysler put on DM1.19 to DM 87.49 on the prospect of merger talks between DaimlerChrysler Aerospace and France's Aerospatiale.
Paris traded fairly narrowly in dull volumes to close with the CAC-40 index up 38.34 at 3,997.06. This was 38 points below the best of the session. Renault was a firm feature, adding #2.30, or 6.1 per cent, at #39.90, and so was France Telecom, which ended #3.60 better at #74.10. Oils lost ground. Total shed #3.30 at #91.70 and Elf Aquitaine #3.80 at #98. A downgrade from Goldman Sachs sent food retailer Carrefour down #22 at #597.
LVMH remained upbeat amid talk that it and Italian fashion house Gucci were close to a "deal". The luxury goods leader rose #5 to #198. Amsterdam-listed Gucci jumped #4.90, or 8.9 per cent, to #60.
Amsterdam rebounded 6.82, or 1.3 per cent, to 514.11 on the AEX index with telecoms leader KPN up 7.6 per cent turning in the day's best performance. KPN rose #3.20 to #45.20, while Heineken gained #2.15 to #50.45. Financials were mixed. Fortis added #1.55 to #34.20, but ABN Amro dipped 20 cents to #17.30 in volume of 15.2 million shares.
Zurich came under pressure late in the session as the relatively buoyant performances of the leading pharmaceuticals stocks failed to counteract further weakness in the financials. The SMI index finished 37.0 lower at 7,088.0, off a high of 7,239.6.
Pharmaceuticals were in focus after Roche reported that 1998 sales rose 31 per cent. The figure was in line with expectations but still prompted a number of recommendations. Upbeat comments about sales of its obesity drug Xenical and the prospects for its approval by the US authorities helped to keep Roche certificates up SFr130 at SFr17,400.
Milan came off highs as investors responded cautiously to early weakness in the Dow. The Mibtel index ended 81 or 0.4 per cent up at 23,215, compared with a peak of 23,640.
Olivetti, the telecommunications and computer group, attracted interest after its Infostrada fixed-line unit announced good results. The stock, which has been volatile this year, was 7.6 per cent higher at one stage before settling down to close at #3.07, up 7.1 cents, or 2.4 per cent.
