A European share rally faded on Monday as Wall Street opened indecisively, failing to capitalise on the surge that propelled the Dow back above the 9,000 level on Friday.

Frankfurt

Germany's Xetra Dax index fell on Monday after early gains, with a lack of signals to inspire the market preventing a traditional year-end rally, traders said.

By 1515 GMT the electronically traded Xetra Dax was down 1.9% at 4,709.37 points.

The floor Dax fell 1.2% to 4,718.93 points.

"Turnovers are very modest and in the next few days we should stay between 4,600 and 4,800 points," said Hans-Guenter Vomhof, a trader at Westdeutsche Landesbank in Duesseldorf.

Traders said that with a pan-European interest rate cut last week, the prospect of another market boosting near-term rate cut had been quashed.

Traders also said the dollar, staying under 1.68 marks, was failing to provide support, as was the Dow Jones Industrial Average, which was up a meagre 0.1%.

A stronger dollar makes German exports cheaper and increases the value of exporters' dollar-denominated sales.

Lufthansa, down 4.6% at 35.60 marks, was one of the day's big movers.

Traders said Schering, up 1.6% at 210.90 marks, was continuing to benefit from its likely participation in the life-sciences merger between Hoechst and Rhone Poulenc. Hoechst fell 1.1% to 70.25 marks.

Siemens also slipped 2.7% to 100.00 marks, extending Friday's losses after the company disappointed analysts last week when it failed to provide them with new plans for development.

Paris

Paris stocks closed up 0.87% on Monday, after the Dow's bullish performance on Friday failed to follow through at start of trade on Wall Street.

It was a largely trendless session after the quickfire corporate action of last week.

The Cac 40 index closed up 32.63 points at 3,771.22, after peaking at 3,794.94 earlier in the session.

Traders attributed the lacklustre session to a lack of investor interest, scant corporate news and preparations for euro launch.