German shares weakened, tracking bunds lower after US Treasuries dropped on talk of a possible Japanese interest rate rise. Volumes were relatively low. Options expiry and imminent M3 money supply dominated.

Paris CAC-40 2,100.70 (-7.24)

French stocks ended slightly weaker and just above solid technical support yesterday. Kitchen appliance maker Moulinex bucked the trend to surge 21 per cent as investors hailed its restructuring plans.

"I think it's going to be a long hot summer unless something dramatic happens with the Russian elections," said Mr Marc Altmann, head of Credit Lyonnais market-making in London. "There's a big lack of interest."

Milan Mibtel 10,669 (-5)

Milan shares slipped back in line with domestic bonds in afternoon trading to end slightly lower ahead of key June inflation figures for three Italian cities which might trigger a rates cut dealers said.

Shares made good progress early but ran into some profit taking.