The FTSE 100 index was showing a loss of 22.1 points to 6,428.4 and the techMARK slid 29.59 points lower to 3,627. In Frankfurt, the DAX30 fell by 23.59 points to 7,383.32 and the Paris CAC-40 rose 33.66 points to 6,548.20.Earlier in Asia, the Nikkei 225 index closed 38.50 points firmer at 16,983.57 and Hong Kong's Hang Seng ended 269.24 points higher at 17,710.07.

On Wall Street last night, the Dow Jones Industrial Average ended 64.35 points lower at 10,739.9 and the technology-rich Nasdaq composite index shed 97.73 points to 4,176.94.

The markets were driven downwards following the publication of a slightly larger than expected increase in the US June consumer price index and dealers remain nervous ahead of Thursday's congressional testimony by Federal Reserve Chairman Alan Greenspan.

Meanwhile, Britain's office for national statistics on Wednesday published stronger than expected retail sales figures at the same time, minutes from the Bank of England latest Monetary Policy Committee showed the body voted unanimously to hold the bank's repo rate at 6.00 per cent on July 6.

However, it remained divided over the near-term outlook for rates. Among the decliners, Marks and Spencer fell 2.25 pence to 233.5 pence after a cautious trading update. The troubled high street retailer reported a 0.2-per cent fall in sales for the first 15 weeks of the financial year and forecast that the market will remain "tough for the foreseeable future."

Another retailer Tesco also slipped lower, falling 0.75 pence to 208 pence after it announced it is to provide $18 million cash over the next three years to launch a women's website.

Also in the news, travel venture Go-Ahead rose 111 pence to 661 pence after it announced it was rejecting a takeover offer from Caisse des Depots-Developpement, an industrial holding company, and Rhone Capital, a private equity fund. CGNU, the insurer formed from the merger of CGU and Norwich Union earlier this year, reported upbeat first half new business figures.

However, the share fell following a broker's downgrade and was trading 31 pence lower at 1,081. Technology stocks were also under pressure following declines on the Nasdaq.

Sage fell 14.5 pence to 559.5 pence and ARM Holdings slipped 19 pence to 763.5 pence. In Frankfurt, technology stocks also declined, with Infineon falling 0.49 euros to 84.43.

In Paris, top gainers included Remy Cointreau that rose 1.55 euros to 32.75 after the company announced a 14.2 per cent rise in first quarter sales and reiterated plans to consolidate its position as a major player in the alcoholic beverage industry.

By contrast, Euro Disney was 0.01 euros lower at 0.69 euros after reporting third-quarter to June 30 sales of 253.6 million euros, one percent lower than the year earlier.

Tokyo stocks rebound on high tech buybacks
Tokyo: Tokyo share prices rallied in late trading Wednesday as investors bought back expensive technology issues and cast aside earlier worries about Japanese companies' bad loans, brokers said.

The key Nikkei-225 average recouped its early losses to close up 38.50 points or 0.2 per cent at 16,983.57. The market also took heart from the establishment of three new investment trusts on the day, brokers said."Those investment trusts love high-priced, high-tech issues as well as blue chips including pharmaceuticals. And investors chased them higher," said Nikko Securities senior analyst Hiroichi Nishi.

The Topix benchmark of all first-section issues fell 2.28 points to 1,539.67. Turnover on the Tokyo Stock Exchange's major board totalled an estimated 670 million shares against Tuesday's 694.3 million shares.

Information technology issues led the Nikkei's early decline following a drop in the technology-heavy US Nasdaq composite, brokers said. The market was also gripped with fears over bad loans following the collapses of department store chain Sogo Co. Ltd. and real estate developer Seiyo Corp.