Shares in Paris showed a marked contrast with other European bourses and rose strongly. The appointment of Laurent Fabius as finance minister, while no surprise, did no harm to sentiment thanks to his stance on tax cuts.

A stronger Nasdaq compounded the positive effect on technology stocks and the CAC 40 index closed 86.59 higher at 6,450.85. The biggest blue-chip gainer was publishing and defence group Lagardere which rose 7.1 per cent or €6 to €90.50. Utility and media group Vivendi was €4.30 higher at €128 in spite of denying it was interested in buying drinks group Seagram or US cable company Cox.

Frankfurt drifted lower throughout the session to close with the Xetra Dax index off 39.93 at 7,892.49.

Acquisition news kept motor giant Volkswagen pointing ahead, but most leading stocks took their lead from a bout of nervousness for bond markets. Deutsche Telekom lost €1.40 at €88 and Siemens €5.30 at €160. Financials were equally dull. Dresdner Bank shed 77 cents at €45 while Deutsche Bank slipped €1.32 to €71.20.

Amsterdam traded narrowly to end with the AEX index little changed. The benchmark finished off 1.36 at 682.12. Philips and Royal Dutch pushed in opposite directions on a day of few features. Philips gained €6.20 to €189 while Royal Dutch, unsettled by the latest Opec gathering, eased €1.85 to €57.15.

Milan ran out of steam, with the Mibtel index closing 127 lower at 32,819, although Olivetti and Tecnost kept the rally going. Olivetti gained 2.2 per cent to €4.07 and Tecnost put on seven cents to €4.23 amid speculation that the two may merge to shorten the chain of command within the Telecom Italia group.

Madrid closed lower in spite of brisk trade in electricity companies amid takeover activity. The Ibex 35 index lost 51.8 to 12,162.