Dax: 2551.62 (-22.07)

German shares closed sharply lower after Bundesbank president, Mr Hans Tietmeyer said that Germany had reached an economic trough. His comments were interpreted negatively as an indication that interest rates are unlikely to fall in the short term. The market tried on a couple of occasions to break out of its depression but to no avail.

CAC-40: 2112.85 (-0.43)

The Paris market closed only marginally lower after earlier tracking the decline in the bond market once the Bundesbank announcement on interest rates found its way through to the market. The market was also awaiting the expiry of June futures and options contracts before making a move, dealers said.

Mibtel: 10445 (-91)

Italian shares fell 0.8 per cent at the close in disappointment that there was no prospect of an Italian interest rate cut near term as well as an overall lack of activity, which traders said was eroding prices.