Shares in Frankfurt shot more than 3 per cent higher, undeterred by Wall Street's sluggish start and US Federal Reserve chief, Mr Alan Greenspan's cautious comments on the current level of US equity prices. The Xetra DAX index climbed 158.70 to 5,197.15.
Siemens roared #6.45 or 11.2 per cent higher to #61.05 as Lehman Brothers added the industrial group to its list of 10 "uncommon euro value" stocks and set a target price of #70 a share.
The high-tech sector was lifted by the overnight news from Microsoft of a 75 per cent surge in quarterly earnings, far beyond analysts' most optimistic estimates. Engineering and telecoms group Mannesmann climbed #8.30 to #127.50 while Deutsche Telekom overcame early profit-taking to rise #3.20 to #40.50, still building on Tuesday's upgrade from Commerzbank.
SAP lost #8.20 to #304.80, its lowest level since early January 1998, after Dutch software group Baan said it expected a hefty fourth-quarter loss.
Paris was lifted 1.7 per cent by a record high for market heavyweight France Telecom in slightly better volume than normal recently. The CAC40 index closed up 68.76 at 4,184.75.
The telecoms giant led the day's performance tables, hitting a session best #82.60 as investors chose to refocus on the sector. The shares closed 8.4 per cent higher at #82.40, up #6.40.
Oils leader Elf Aquitaine was in the thick of the action, jumping to #103.40 on talk that Shell was set to launch a take-over bid. The stock ended up #1.50 at #98.50.
Banks, buoyed by merger speculation, stayed firm for the third day running. BNP added #4.35 at #81.50 and Societe Generale gained #3 at #158. Valeo shed #3 at #68 ahead of 1998 results due today.
Consumer products leader Moulinex came off #1.07 or 9.2 per cent at #10.53 on news of a 10 per cent fall in third-quarter sales plus a further round of redundancies.
Amsterdam extended its rally to 6 per cent in four days with the AEX index rising 5.69 to 554.57.
Philips powered ahead in the wake of Tuesday's stronger than expected earnings statement from US technology stocks leader Microsoft. The shares ended #2.85 better at #67.35. However, Baan tumbled 85 cents or 8.7 per cent to #8.95 on news of final quarter losses of $250 million (#216 million), twice the level of the consensus of brokers' forecasts.
Madrid rose as concern about Latin American exposure eased. The general index gained 8.39 to 889.11.
Milan closed higher but off its peak after a day which saw speculative trade add to volatility. The Mibtel index closed 193 higher at 24,039.
(# - Euro)
