Shares in France Telecom soared in very heavy trading after their listing yesterday, ending the day 13.4 per cent higher in Paris with almost 4 per cent of its capital, worth eight billion francs (£88 million) changing hands.

It was virtually the same story in New York, where the shares were up 9 per cent in the first few minutes of trading with 1.2 million shares changing hands.

Buying fever hit the market from the outset in Paris, as many of the 3.9 million small shareholders receiving stock went for a quick profit, with their shares being snapped up by institutional investors, who had sought 20 times as many shares in the telecommunications giant as were on offer by the French government.

Some institutional investors then decided it was rather expensive, and started to sell instead, which sent the share lower, one Paris analyst said.

He said a realistic price is between 210 and 220 francs.

The government sold 23.2 per cent of France Telecom, 20.9 per cent to small shareholders and major investors, and a further 2.3 per cent to employees, reaping 42 billion francs for state coffers in the first partial privatisation of a public service entity.

Shares started trading in Paris at 215 French francs 18.3 per cent higher than the issue price of 182 francs for small shareholders and 14.97 per cent higher than the 187 franc issue price for institutional investors.

They slipped back somewhat as the day progressed but still ended the day 13.46 per cent higher at 206.50 francs.