Frankfurt DAX: German share prices closed with a loss of 1 per cent as the DAX index of 30 leading shares finished at 4148.34 points from 4190.08 points on Wednesday. Sentiment was clouded by further losses on Far Eastern stock markets. Durr was the biggest gainer on the day, jumping three D-marks to DM56 after new it had received a DM175 million order from Audi while Philip Holzmann was one of the biggest losers on the day.

Meanwhile, the credit-rating agency Moody's has warned that it might downgrade the ratings of some German banks to take account of expansion abroad.

Moody's said in its annual report on German banking that growing internationalisation of big German banks had increased exposure to global risks.

Paris CAC-40: The Paris Bourse rallied late in the session after a bout of weakness early in the day, and wound up with a moderate gain as the CAC-40 index finished at 2932.75 points, up 0.44 per cent on Wednesday's close.

Traders said the market mood was hesitant and noted that the start of trading had been delayed by almost two hours due to technical problems. One dealer said that the market was virtually paralysed by mixed signals from Asia, and that was probably entering a phase of doubt and volatility.

The dollar's firmness helped somewhat, traders said. Share volume came to 7.2 billion francs on the monthly settlement market.

Milan Mibtel: Italian shares came off their early lows in afternoon trading to close with modest gains. The market weakened in early trading on a technical correction to the recent strong rally, but was underpinned by a good level of liquidity.

Fiat rose after recent falls with attention on its Brazil operations after General Motors said that it was increasing output in Brazil as a result of improved car sales. ENI rose almost 2 per cent and Pirelli was more than 2 per cent higher after both shares had lost ground in recent sessions. Banco di Napoli closed almost 9 per cent lower as investors took profits.

Olivetti was the heaviest traded share despite a statement from its mobile phone associate that its user base increased by 250 per cent last year.