LONDON, June 25: European equities fell on Monday following a heavy sell-off on Wall Street before the weekend, and as dealers digested the London Stock Exchange's takeover bid for Borsa Italiana.

The LSE has outlined plans to buy Borsa Italiana for 1.6 billion euros ($2.15 billion), bolstering the London market amid takeovers of European stock markets by US rivals.

In late morning deals on Monday, the FTSE 100 index of top shares fell 0.26 per cent to 6,550.10 points, in Paris the CAC 40 reversed 0.88 per cent to 5,970.20 points and Frankfurt's DAX 30 erased 1.26 per cent to 7,854.54.

The DJ Euro Stoxx 50 index of leading eurozone shares slid 0.88 per cent to 4,440.07 points.

The euro stood at 1.3455 dollars.

Wall Street was hammered last Friday as fresh signs of trouble in the US housing market unnerved investors, dealers said.

In London on Monday, LSE shares slid 0.59 per cent to 1,347 pence after the market confirmed plans on Saturday to buy Borsa Italiana.

The merger of Borsa Italiana and the London Stock Exchange creates the leading diversified exchange group in Europe and the platform for additional strong growth on a European and global scale, the pair had said in a statement.

The British capital's FTSE 250 index, on which the LSE is listed, showed a fall of 0.54 per cent at 11,526.00 points on Monday.

Meanwhile, the Independent newspaper reported here that Nasdaq, the US stock market operator which owns a 30 per cent stake in the LSE, was considering a campaign of opposition against the bid.In Paris, France Telecom shares tumbled 2.43 per cent to 20.49 euros, after the French government said on Sunday that it would sell at least five per cent of its 32.41-per cent stake to reduce national debt.

Economy Minister Christine Lagarde had said in a statement that the transfer of at least five per cent of shares in the telecommunications operator would bring in some 2.7 billion euros ($3.6 billion).

According to several brokers, the sale could take place at between 20.40 and 20.70 euros per share.

In US deals on Friday, the Dow Jones Industrial Average had plunged 1.37 per cent to close at 13,360.26 points and the Nasdaq composite tumbled 1.07 per cent to 2,588.96.

The broad-market Standard & Poor's 500 index sank 1.29 per cent to 1,502.56 points.

Jitters about mortgage failures hitting the financial sector took the spotlight away from the Blackstone Group's debut on Wall Street.—AFP