Although the Fed effect proved short-lived in Europe, there was still some uplift for technology, media and telecommunication stocks.

Europe's biggest software group SAP rose more than 8 per cent, after it kicked off the sector's reporting season with a better-than-expected set of results for the first quarter. Net profit doubled and sales rose 29 per cent compared with the first quarter of 2000.

SAP also gave an optimistic assessment of its prospects for the next two quarters. It said operating margins would rise from 14 per cent in the first nine months of 2000 to 15-16 per cent this year. Morgan Stanley raised its rating from "neutral" to "outperform".

Other software groups shared in the upthrust. French IT services group Cap Gemini rose 7 per cent to #147, while Dassault Systemes rose a more modest 2.2 per cent to #56.10, having gained more than 14 per cent the day before. The picture contrasted with the Anglo-Dutch IT consultancy CMG which fell 17 per cent after warning of losses in its telecom products division.

Among smaller techs, Tria Software jumped 31 per cent to #4.65 after announcing a contract to train workers at Emea, the Internet subsidiary of Intel. Tria shares peaked at #44.21 last year.

The semiconductor market continued to send out mixed signals. While Wednesday had seen Intel's better-than-expected results, yesterday STMicroelectronics poured cold water on share prices by saying the global chip market would shrink by up to 15 per cent this year. STMicro fell 1.4 per cent to #43.39, Infineon fell 2.9 per cent to #48.30 and ASM Lithography fell 2.4 per cent to #28.82.

Lehman Brothers raised its rating on the media sector from underweight to neutral. Vivendi Universal, which gained 0.4 per cent to #74.70, was raised to "buy", while Havas Advertising, which gained 3.3 per cent to #14.80, was given a "market perform" rating.

The best telecom performer was Sonera, up 5.8 per cent to #10.95, while France Telecom gained 1.9 per cent to #81, but Deutsche Telekom slipped 1.2 per cent to #29.94.

Another victim of the shake-out, French video games developer Kalisto, surged 64 per cent to #1.46, after saying talks to find new partners for the company were advancing.

French pharma group Sanofi-Synthelabo dropped 2.3 per cent to #61.80, as energy group TotalFinaElf confirmed that it had cut its stake by just over 2 per cent.