In London, the FTSE 100 index of leading shares was showing a loss of 36.9 points at 6,354.4 points. In Paris, the CAC 40 index was showing a loss of 1.44 per cent, or 93.76 points, mid-morning at 6,436.15 points. Meanwhile, in Frankfurt, the DAX index opened 0.01 per cent higher at 7,113.08 points.

Dealers said that trading volumes in Europe were light ahead of interest rate decisions here. The modest declines here followed further losses on the high-tech US market. The Nasdaq composite index lost 0.73 per cent overnight, prompting a sell-off in Asia.

Share prices in Tokyo dropped 2.4 per cent as falls in US technology stocks triggered selling in their Japanese counterparts, while Hong Kong share prices closed a modest 0.01 per cent lower.

Some of the leading British stocks were influenced by company-specific announcements. Barclays Bank stock rose by 23 pence to 1,638 pence after the bank said that pre-tax profit in the first half of this year had more than doubled to 1.84 billion pounds ($2.76 billion, 2.9 billion euros).

Shares in Royal Sun Alliance insurance group rose by 13.25 pence to 429.5 pence after the company reported a rise in first-half operating profits and interim dividend payments. In contrast, Rio Tinto mining stock fell by 26 pence to 1,045 pence after it announced plans to raise a bid for Australian mining group North.

Shares in BAE Systems weapons manufacturer fell by 1.75 pence to 423 pence in a continuation of losses seen since the company suffered a downgrade from brokers on Wednesday.

Tokyo stocks fall 2.4 per cent
Tokyo: Share prices in Tokyo dropped 2.4 per cent Thursday as falls in US technology stocks triggered selling in their Japanese counterparts, brokers said. The Tokyo Stock Exchange's key Nikkei-225 index shed 391.75 points to finish at 15,814.44.

Investors sold key electronics and information technology shares after the US technology-heavy Nasdaq composite index dropped 27.06 points, or 0.7 per cent, to 3,658.46 Wednesday, falling for the second day in a row. "The sustained fall on the Nasdaq posed fears not only for the short-term but the mid-and long-term outlook of the performance of US high-tech stocks," Partners Asset Management strategist Takashi Miyazaki said.

Selling accelerated in afternoon trading after Sony Corp. temporarily fell below the psychologically important 10,000-yen level and heavy selling hit other key technology shares, brokers said. Sony fell 390 yen, or 3.8 per cent, to 10,010 yen. With Thursday's fall, the Nikkei 225 fell closer towards this year's lowest level of 15,727.49, recorded on Monday.

The Topix index of all issues on the first-section fell 22.13 points to 1,460.47, with an estimated 517 million shares changing hands on the section against Wednesday's 526.7 million shares. "The market has yet to pull out of the downtrend," Partners' Miyazaki said.

Some of the information technology shares and electronics companies were heavily sold since the outset of Thursday's trading, brokers said.

"Investors were becoming nervous over continued falls in the Nasdaq and the volatility of the Nasdaq led them into a selling-spree," Nomura Securities' senior market analyst Tatsuo Kurokawa said. Softbank Corp. fell 360 yen, or 6.3 per cent, to 8,300 yen. TDK Corp. dropped 890 yen, or 6.3 per cent, to 13,350 yen and Nippon Telegraph and Telephone Corp. (NTT) was off 60,000 yen, or 4.5 per cent, at 1.28 million yen. Pioneer Corp. dropped 300 yen, or 7.4 per cent, to 3,780 yen.