Credit Suisse led European shares lower yesterday to break a six-session rally that took indexes to new 2003 highs, but a steady dollar versus the euro helped export sectors such as chemicals.
Shares in Germany's BASF AG, the biggest chemicals company in the world by sales, rose over three per cent amid signs of better trading conditions in parts of the sector.
Swiss chemicals firm Clariant predicted a net profit for the year, but its shares dropped on concerns about soft margins and as big stakeholder Aventis unloaded stock.
Autos and basic producers, other sectors that sell products in the United States, were also helped by Monday's dollar surge to one-month highs against the euro, which increases the value of European exports.
Technology, which helped lead bourses to new highs for the year in recent sessions, eased along with its global totem, the Nasdaq Composite index on Wall Street.
By 1500 GMT, the FTSE Eurotop 300 index was down 0.67 per cent at 931 points, giving back some of Monday's push to new highs for the year when stocks rose for the sixth straight session amid some good US economic numbers and steady earnings.
The earnings news was lighter yesterday and there was no major US economic data to give investors a fresh steer.
Stock chartists said the market's pause was expected. "It's a normal consolidation - there is nothing more dramatic than that for the time being," said Tim Parker of StockCube.
"We have had breakouts in the more aggressive sectors in the market like technology. That is a story that has been around for some time and will continue. The momentum is still there," Parker said.
The DJ Euro Stoxx 50 index fell 0.58 per cent to 2,616 points.
On Wall Street, the Dow Jones industrial average was off 0.3 per cent at 9,825 points after clocking up its best close in 17 months on Monday. The Nasdaq Composite fell 0.57 per cent to 1,956 points, with the tech-studded index up more than 70 per cent from its mid-March low.
Shares in Credit Suisse fell 5.2 per cent to 46.15 Swiss francs as investors looked past better-than-expected quarterly net profit to a warning that more pain was needed to cement its earnings turnaround.
German peer Commerzbank also fell as it denied market rumours of a profit warning and insisted it would post an operating profit for the third quarter.
Meanwhile, beverage stocks were also in good spirits as BNP Paribas bank raised its price target on French drinks group Pernod Ricard to €94.2 after what BNP called excellent third-quarter sales.
Pernod shares were up 3.2 per cent at €87.10, hitting new highs for the year. Elsewhere in the sector, Britain's Diageo rose one per cent to 705 pence, also hitting fresh 2003 peaks.
On a more sour note, Gucci sank 1.8 per cent to €73.85 on news that Chief Executive Domenico De Sole and designer Tom Ford will leave the luxury empire they created from an almost bankrupt family firm.