Frankfurt DAX: Daimler-Benz shares rose 6.9 deutschmarks, or 3.9 per cent, to DM183.80 in an otherwise weaker German share market, which recouped its early losses to trade marginally higher only to fall back yet again. Shares in BMW slumped after it released first-half earnings figures and said it was forced to cut jobs at its Rover subsidiary because a strong sterling was sapping profits.

BMW said its first-half net profit rose 17 per cent to DM511 million. Traders said the car manufacturers shares were hit both by the results, which they said were at the lower end of some expectations, as well as by concern over the health of Rover Group.

Paris CAC-40: Paris stocks firmed around 0.7 per cent after a jumpy start with traders worried about Wall Street losses. The index rose on a surge of interest for defence stocks though it too fell back again and closed holding on to a gain of 0.3 per cent.

Thomson-CSF, seen benefiting from faster-than-expected restructuring, was marked up 4.3 per cent at 225.6 francs. Dassault Aviation, which in the near term looked temporarily sidelined by the deal, was down 1.4 per cent at Ffr1920. Lagardere and Aerospatiale said they planned to move towards a strategic European accord to produce a combat aircraft in liaison with Dassault Aviation.

Milan Mibtel: The Milan market ended flat after scrambling off the session lows as Wall Street pared its early losses. The focus centred on a handful of stocks in the banking and utilities sectors.

Utility stocks performed well on good prospects for growth. Milan utility AEM ended up 5.7 per cent after being briefly suspended for excessive gains. Edison rose on the back of the AEM gains to end up 3.8 per cent.

Among the banks, Credito Italiano had a good session, gaining 4.8 per cent after its chairman said first-half results should be ahead of budget. Banca di Roma was also strong as was Banca Intesa.