World Markets: Frankfurt

GERMAN SHARES drifted slowly downards in light trading, with the DAX index closing 1 per cent lower at 5,006 on the last dealing session before the new year and the birth of the euro.

Telecoms shares continued to fall on concerns that an escalating price war in the German phone market would depress earnings.

Deutsche Telecom fell 2 per cent, while Mannesmann, the engineering company that owns Germany's largest mobile phone company, dropped 2.5 per cent.