Shares in Zurich fell more than 2 per cent, under pressure from a financials sell-off that was compounded by the weaker start on Wall Street. The SMI index registered a loss of 130.8 at 6,018.9.
Textile machinery and components maker Saurer crashed 15 per cent after the company said it expected lower 1998 profits. UBS, which said it would publish the findings of an internal audit by the end of the week, lost 23 Swiss francs to Sfr315. The audit is expected to shed light on the bank's costly involvement with Long-Term Capital Management, the troubled US-held fund. Credit Suisse Group lost Sfr4.50 to Sfr167.75.
Paris ended little changed after another fairly volatile session. The CAC-40 index closed off 0.59 at 3,337.05 in turnover of 13 billion French francs. France Telecom fell Ffr13.00 to Ffr350 for a twoday slide of 5.3 per cent as investors fretted about the possibility of a big stock overhang with the government teeing up the sale of further state-owned shares.
Selected banks supplied solid support, rallying from recent lows following a positive note from Lehman Brothers. Amsterdam took a stern profits warning from steel leader Hoogovens on the chin and fell 11.50 to 957.89 on the AEX index.
Frankfurt was burdened by further weakness in the utilities during a day of cautious trade as the market adjusted to the new government. By the close, the Xetra DAX index was 77.23 or 1.7 per cent lower at 4,600.33.
Utilities remained out of favour on worries that the new Greens-included government would push to end atomic power use and impose taxes on energy consumption.
Milan was dominated by activity in the banking sector, and the Mibtel index edged marginally lower, falling nine to 19,288.
