Europe's leading markets, up four days out of five this week, finished in upbeat mood yesterday. The FTSE Eurotop 300 index managed a net gain of 4.7 per cent. The big result of the day was from Swedish telecom equipment maker Ericsson, which gained more than 10 per cent on its third-quarter results.

The results showed a mixed picture - but with more positive than negative elements. On the plus side, the operating margin was in the black against expectations. Cash flow was also positive, although the sales outlook was weak.

Ericsson announced that Lars Ramqvist, its chairman, would step down next March, a change welcomed by investors. But the firm warned that its core markets were unlikely to recover next year.

Last week Nokia pleased the market with quarterly results that prompted some switching out of Ericsson into Nokia.

Yesterday, Ericsson was up 11 per cent at €49.40 in late trade, Nokia rose 3.5 per cent to €24.16 and French telecoms equipment maker Alcatel was up 4.6 per cent to €17.39.

Ericsson's credit rating was downgraded by Moody's. Senior debt was lowered one notch to Baa1, the lowest investment-grade bracket. In chipmaking, Infineon rose 4.3 per cent to €18.27, STMicroelectronics rose 7.3 per cent to €34.09 and ASML, the chip equipment maker, rose 7.5 per cent to €17.20.

Chipmakers were also encouraged by Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, which posted better-than-expected third-quarter results and forecast further improvement in the fourth quarter. Philips, which has a 30 per cent stake in TSMC, rose 6.9 per cent to €26.70.

Most telecoms were in the black, including France Telecom, which had a volatile week. Yesterday the shares were back up 5.2 per cent to €43.88, having lost over 6 per cent the previous day after the release of quarterly results. KPN Telecom rose 6 per cent to €4.55 and Equant added 8.8 per cent to €12.95, making a rise on the week of 27 per cent.