The European Parliament approved by an overwhelming majority a motion to raise to 65% from the 55% proposed by the European Commission the proportion of packaging waste that should be recycled.

US government bond prices closed sharply higher, sending yields to new lows, after a weaker-than-expected July nonfarm payroll report raised expectations that the Federal Open Market Committee may cut interest rates to ensure economic growth, dealers said.

The European Commission will require Deutsche Lufthansa AG to give up slots between Frankfurt and 4 US cities, as well as forcing proposed tie-up partners United Airlines, Lufthansa and Scandinavian Airlines System to open up their frequent flyer programme to competing new entrants, AFX News has learnt from sources close to the case who have read the EU's report.

The euro gained on the dollar as the US trade deficit rose to a record high in May, confounding consensus estimates, dealers said.

Shares in technology companies traded lower midsession, as investors continued to take their cue from the recent slew of negative news hitting the sector and as buyers widely continued to remain elusive, dealers said.

Leading shares slumped to 8-month lows in midmorning deals, with just one blue chip in positive territory as investors fretted over Wall Street's precipitous falls overnight, yesterday's dismal retails data and a raft of poor news from the US tech sector, dealers said.

Technology shares were lower midsession, with the Nasdaq composite hovering near its lows for the day amid worries about the upcoming earnings season, with fears of ongoing tensions in the Middle East continuing to weigh on sentiment, dealers said.

Most analysts expect the European Central Bank to keep interest rates on hold when it meets on Thursday.

Economists believe the European Central Bank will leave interest rates unchanged at its meeting on Thursday.

Researchers have found economists believe interest rates in Europe will remain unchanged next week but there will be a cut in rates before June.