French shares reach new high

Frankfurt Dax: 3798.51 (+42.69)

German shares extended their gains in late electronic trading, shrugging off a sluggish start on Wall Street, as liquidity conditions remained good and bank shares remained in demand.

Dealers see little downside risk as the end of the second quarter approaches, with dealers cheered by the breaking through of a number of important Dax chart points.

Paris CAC40: 2867.44 (+82.68)

French shares surged 3 per cent to an all time closing high, powered by the gains on Wall Street, a rebound by the dollar and higher bond prices.

The market was also helped by the news that Compagnie Bancaire had offered to buy out its units Cardif and Locabail for a maximum three billion francs.

French banking stocks jumped on the back of Cie Bancaire's gain of nearly 7.5 per cent, traders said.

Milan MIBTEL: 13469 (+153)

Italian shares closed sharply higher and just below the Mib's record high.

The latest surge came on the back of heavy buying of telecom shares and the giant energy group ENI.

Further rises are likely if dealers now turn their attention to the bank and insurance sector.