Deutsche Börse, the German exchange operator, today looked isolated after pulling out of the race to buy rival Euronext, clearing the path for the New York Stock Exchange to pursue a bid uncontested. The German group's decision came just a week after similar talks ended with Borsa Italiana.

Its decision to withdraw came as Europe's exchanges faced mounting competition from investment banks following news that seven of the largest have clubbed together to create a pan-European equity trading network to challenge the dominance of the traditional exchanges.