European equities slipped yesterday afternoon as the dollar lurched lower, fuelling concerns that companies such as Germany's DaimlerChrysler may struggle to compete in foreign markets.

"The dollar's weakness causes problems for European automakers, particularly as a lot of them sell directly into the US market," said John Hatherly, head of global analysis at M&G Asset Management.

Wall Street opened lower, adding to European stocks' woes. Among standout movers, Sanofi-Synthelabo lost 1.2 per cent after a study found low-dose aspirin was as effective and much cheaper than a blood thinning drug sold by the French company under the brand name Plavix.

By 1440 GMT, the FTSE Eurotop 300 index of pan-European blue chips was down 0.6 per cent at 929.62 points. The narrower DJ Euro Stoxx 50 index lost 0.7 per cent to 2,618.67. Volumes were low after the US Thanksgiving holiday and with New York open for only a half-session yesterday.

The euro's leap to a lifetime high against the dollar rekindled worries that European companies may find it harder to sell their products in dollar-denominated markets.

In the auto sector DaimlerChrysler lost 2.1 per cent, BMW slipped 2.9 per cent, Volkswagen gave up 2.5 per cent and Porsche ceded 2.3 per cent.

Vestas, the world's leading wind turbine maker, tumbled 19 per cent after the company cut its full-year profit margin forecast and said sales would be in the low end of the expected 1.7-1.8 billion euros range.

French utility Veolia Environnement joined the decliners, slipping 2.3 per cent after investment bank Morgan Stanley downgraded its rating on the stock to "underweight" from "equal-weight".