European blue-chips headed for a second straight lower close yesterday as investors locked in profits after strong runs in tech and auto stocks, while Aventis rose following successful trials of its cancer drug.
Hard-rallying cyclical stocks paused for breath as the corporate and economic news flow slowed, giving under-performing healthcare and food stocks a chance to catch up.
"Investors are selling today what they have been buying most of in the last couple of months: techs, autos and consumer cyclicals," said State Street analyst Michael O'Sullivan.
"Investment flows across the market are still in favour of reflation, which suggests that this is just a short-term pullback for European equities."
By 1535 GMT, with all but Frankfurt's DAX closed, the FTSE Eurotop 300 index was down 0.8 per cent at 904 points, but still some 33 per cent above its March low.
Declining issues eclipsed advancers by nearly four to one in modest volume.
The narrower DJ Euro Stoxx 50 index shed 1.5 per cent to 2,565 points, having hovered near 2003 highs over the past week.
"It's a normal evolution when you look at the extraordinary performance the European stock market has shown in the past weeks," said Gert de Mesure, head of equity strategy at Delta Lloyd Securities in Antwerp.
Wall Street was also weak, with the Dow Jones industrial average down 0.4 per cent and the Nasdaq Composite 1.3 per cent softer.
Around Europe, Britain's FTSE 100 index closed 0.3 per cent lower, France's CAC 40 was 1.4 per cent weaker and the Swiss SMI was 0.2 per cent higher. Germany's DAX was down 1.8 per cent in late trade.
French telecom equipment maker Alcatel, which hit a 15-month high on Tuesday, was the top blue-chip decliner as it slumped 5.6 per cent, while Dutch consumer electronics firm Philips backed off its year-high, falling 4.5 per cent.
Finnish mobile giant Nokia was also weak, down 4.4 per cent after Tuesday's lacklustre mid-quarter update.
Auto makers, parading their latest models at Frankfurt's international motor show, caused some market jitters with their latest outlooks.
"The whispered consensus of expectations was better than the actual impression given by the firms," said Jochen Mathee, a fund manager at Invesco. "Historically, car stocks always rally in the week before the car show and then come off afterwards."
DaimlerChyrsler fell 2.5 per cent, while Volkswagen and BMW were both down 2.9 per cent.