European markets ignored renewed wobbles for the euro and a weak start on Wall Street, choosing instead to concentrate fully on hopes for a reviving economy.
The FTSE Eurobloc 100 index moved to within 26 points of its all-time best, adding 1.2 per cent at 1,107.52. The FTSE Eurotop 100 rose 1.2 per cent to 3,122.75 and the broader FTSE Eurotop 300 gained 1.3 per cent at 1,350.52.
Frankfurt, sent 1 per cent lower on Friday by derivatives expiries, rallied strongly to hit a closing high for the year. The Xetra Dax index gained 131.28 or 2.5 per cent at 5,468.47.
Munich Re moved to the top of the European performance charts, advancing a further €14.70 to €189.30 with broker optimism adding to the upturn in sentiment sparked by Friday's upbeat trading statement. CS First Boston lifted its target price to €270 and Goldman Sachs moved up to €228. Allianz added €9.74 at €279.75.
Leading cyclicals also came in for buying. Among chemicals, Degussa Huels rose €1.90 at €39.60 and Hoechst €2.24 at €44.24. SAP reversed early losses following an earnings downgrade for the software leader from BNP. The shares ended €8.30 better at €396.80.
Deutsche Telekom stood aside from the broad upturn, slipping €1.02 to €44.12 ahead of this weekend's pricing for the telecom giant's equity issue of 286 million shares.
Paris fell back after an early rise, depressed by news the Banque de France had intervened in the conflict between three big banks. Banque Nationale de Paris, Societe Generale and Paribas all tumbled after the central bank asked them to reach a compromise solution in their complex merger and acquisition battle.
The three banks have been locked in dispute since BNP launched hostile bids for both the other companies in an attempt to stop them merging. BNP fell €3 or 3.5 per cent to €83, SocGen dropped €12.90 or 6.8 per cent to €176.10 and Paribas ended €7.50 or 6.4 per cent lower at €110.50.
Air Liquide, the industrial gases group, achieved the biggest rise on the CAC-40 index, climbing €8.20 or 5.8 per cent to €149.40 on speculation that it would link with its UK rival BOC. The CAC edged up 5.53 to a record 4,545.09.
Amsterdam got a lift from tech-related buying and the AEX index ended 6.69 higher at 582.72. Philips rose 3.3 per cent, adding €3 at €93 amid continuing enthusiasm for the chip sector.
Goldman Sachs raised its target price for ASM Lithograpy 65 and the stock gained €1.70 at €55.90. ASM International rose 40 cents to €7.25 and BESI 65 cents at €10.40.
