DAX: 3673.03 (+11.19)

Despite lingering concerns over EMU, and Germany's budget problems, dealers in Frankfurt yesterday voiced relief at an emerging deal to settle Bonn's dispute with the Bundesbank over revaluing the nation's reserves, and shares finished slightly higher.

"The important thing is that they seem to have found an amicable solution," one leading trader commented.

CAC-40: 2690.85 (+55.48)

French shares climbed by more than 2 per cent as investors reacted with relief at the makeup of the new left wing government.

Traders said they had been reassured by the composition of the government, with the appointment of Mr Dominique StraussKahn as finance minister seen as posing no threat to monetary union.

Mibtel: 12256 (-4)

Italian shares ended largely flat after trading in narrow ranges through a subdued day. The early rise on Wall Street and data showing a continued inflow of money into equity funds had little positive impact, dealers said.