An outbreak of nerves for bonds took some of the shine off Frankfurt which ended 34.27 lower at 6,891.25 on the Xetra DAX index to partly unwind a gain of 451 points over the preceding two sessions.
This year's 5.5 per cent pay claim by IG Metall sparked talk of an early rise for European interest rates and cast a cloud over bond markets. It led to much more subdued trading after the recent hectic activity.
Among tech stocks, SAP added €6.80 at €685 and Siemens 86 cents at €125.51 but most counters moved lower. Deutsche Telekom shed 26 cents at €66 while Mannesmann came off €1.45 at €235.55. The FTSE Eurobloc 100 index fell 0.5 per cent to 1,331.07 and the FTSE Eurotop 100 index came off 1 per cent at 3,475.63. The broader FTSE Eurotop 300 index lost 0.7 per cent at 1,513.29.
Paris also fell back in spite of another solid session of gains for the media sector. The CAC-40 index ended off 32.22 at 5,613.90.
Cap Gemini, which unveiled plans for an Internet joint venture, stayed in demand, rising €19.90 or 8.3 per cent at €260. Lagardere, widely seen as taking a stake in Canal Plus' satellite offshoot rose €5.50 to €66.25 following a raft of broker upgrades.
Amsterdam ended 6.20 at 648.94 on the AEX index with weakness at Royal Dutch and the heavyweight financials countering fresh media gains. In financials, ABN Amro lost 38 cents at €22.65 and Aegon €2.40 at €87.85 as interest rate concerns gnawed away at sentiment.
Royal Dutch gave up 99 cents at €59.85 while retailer Ahold and chemicals leader Akzo Nobel both lost more than 4 per cent, sliding €1.31 at €27.59 and €2.13 at €46.38 respectively.
Milan nudged higher after Wall Street recovered from a negative start. The Mibtel index ended up 131 at 27,198.
Madrid stocks succumbed to profit-taking in the absence of encouragement from other European bourses or from Wall Street. The Ibex-35 index of leading shares ended down 160.9 to 11,012.4.
Helsinki closed lower with previously buoyant telecom shares succumbing to profit-taking. The Hex index closed down 156.99 to 13,700.38, a fall of 1 per cent.
Nokia fell €1.25 to €169.40.
