Frankfurt DAX: 4363.09 (+29.96)German shares posted gains on modest volumes, heartened by an upbeat close on Wall Street overnight, the stable dollar and the Bundesbank's reassuring decision not to raise a key interest rate. The market posted further gains in thin afternoon electronic trade dealings, with the IBIS DAX ending the post-bourse session at 4377.51.

Paris CAC-40: 2998.57 (+15.13)

Paris, which ended down on Monday, had a volatile morning. Stocks climbed 0.89 per cent at the opening on bullish sentiment after the Bundesbank move but lost most of the gains. A modest pick-up on Wall Street by mid-afternoon failed to help.

Milan Mibtel: 14600 (+225)

Italian stocks closed at higher levels after the Bundesbank set its repo tender at an unchanged fixed rate of 3 per cent.

This settled worries over German interest rates and the market was further supported by the slightly firmer opening on Wall Street.