Renewed anxiety over Latin America's deepening economic turmoil was compounded by Wall Street's weak start and leading European markets closed the week with sharp losses. Amsterdam was the biggest casualty with a fall of 4.3 per cent, while losses of 3 per cent and more were recorded in Frankfurt, Paris and Helsinki. Paris gave up 134.70 at 4,019.33 on the CAC 40 index with luxury leader LVMH, down €14.30 or 6.6 per cent at €203.20, providing the day's steepest decline.

Cap Gemini, up one cent at €150.10, continued to win plaudits from brokers. Deutsche Bank added its name to the list of houses upgrading the shares following Thursday's better-than-expected results.

Valeo powered higher, rising €2 to €69 after the motor components group turned in 1998 results showing widening second-half operating margins. Amsterdam fell steeply, sliding 23.51 to 520.28 on the AEX index as blue chips came under severe selling pressure.

Unilever, hit earlier this week by news of shrinking margins at Swiss food rival Nestle, tumbled €4.25 to €63.70. Brewer Heineken fell €3.25 to €45.75.

Among financials, ING shed €3.95 or 7.3 per cent at €49.85.

KPN, a strong market in recent months, fell foul of broker downgrades, with Commerzbank moving from "hold" to "sell" on the shares. Having outpaced the market by 40 per cent since October, the shares fell €3.90 or 7.7 per cent to €47.

Frankfurt closed lower with the Xetra DAX index down 155.24 at 5,008.21.

Industrial giant Siemens fell 5 per cent after the company reported a 16 per cent rise in sales in the first three months of its current financial year, in line with expectations. The shares lost €3.02 to €57.80 on profit-taking after posting a sharp gain earlier in the week.

Car stocks were bruised by renewed concerns over developments in Brazil, comments by the Volkswagen chief that the German motor industry would have to rationalise to survive and the euro's returning strength.

VW lost €5.07 to €66.83 after Thursday's comments by Mr Ferdinand Piech, chairman and chief executive, that the company faced a difficult year in Brazil, where it had five plants, although foreign exchange developments and new models might soften the blow. Madrid came off almost 3 per cent as stocks with high exposure to Latin America bore the brunt of the selling. The general index shed 24.25 or 2.8 per cent to close at 852.56.